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Are Airlines' Price-Setting Strategies Different?

Author

Listed:
  • Volodymyr Bilotkach
  • Yuriy Gorodnichenko
  • Oleksandr Talavera
  • Igor Zubenko

Abstract

Using a sample of fare quotes for non-stop travel from New York to London, this paper investigates the dynamics of offered fares as the departure date nears. We find that the general trend is toward fare increase at an accelerated rate as the departure date approaches. Clear differences in price-setting strategies among the carriers competing on a particular route are documented.

Suggested Citation

  • Volodymyr Bilotkach & Yuriy Gorodnichenko & Oleksandr Talavera & Igor Zubenko, 2006. "Are Airlines' Price-Setting Strategies Different?," Discussion Papers of DIW Berlin 645, DIW Berlin, German Institute for Economic Research.
    • Handle: RePEc:diw:diwwpp:dp645
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    References listed on IDEAS

    as
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    4. Volodymyr Bilotkach, 2007. "Asymmetric Regulation and Airport Dominance in International Aviation: Evidence from the London-new York Market," Southern Economic Journal, John Wiley & Sons, vol. 74(2), pages 505-523, October.
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    More about this item

    Keywords

    airline industry; price dynamics;

    JEL classification:

    • L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory

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