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Collude, Compete, or Both? Deregulation in the Norwegian Airline Industry

Author

Listed:
  • Salvanes, K.G.
  • Steen, F.
  • Sorgard, L.

Abstract

The purpose of this paper is to test the nature of competition concerning price and capacity setting in the Norwegian airline industry after the deregulation in 1994. Did the two airlines, SAS and Braathens, compete on prices and capacities (competition), collude on prices and capacities (collusion) or collude on prices and compete on capacities (semicollusion)? We reject the hypothesis that they achieved collusion, and we find the observed behaviour consistent with semicollusive behaviour and inconsistent with competitive behaviour.

Suggested Citation

  • Salvanes, K.G. & Steen, F. & Sorgard, L., 1998. "Collude, Compete, or Both? Deregulation in the Norwegian Airline Industry," Papers 18/98, Norwegian School of Economics and Business Administration-.
  • Handle: RePEc:fth:norgee:18/98
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    References listed on IDEAS

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    Cited by:

    1. Nakagawa, Dai & Aoyama, Yoshitaka & Ito, Tadashi & Nishizawa, Hiroyuki, 2005. "Assessment of passenger benefits brought about by international airport projects," Transport Policy, Elsevier, vol. 12(6), pages 512-524, November.
    2. Brueckner Jan K. & Picard Pierre M., 2013. "Airline Alliances, Carve-Outs and Collusion," Review of Network Economics, De Gruyter, vol. 12(2), pages 211-227, June.
    3. repec:eee:ecotra:v:11-12:y:2017:i::p:49-59 is not listed on IDEAS
    4. Vigren, Andreas, 2016. "Competition in Swedish passenger railway : entry in an open-access market," Working papers in Transport Economics 2016:18, CTS - Centre for Transport Studies Stockholm (KTH and VTI).
    5. Markku Stenborg, 2004. "Forest for the Trees: Economics of Joint Dominance," European Journal of Law and Economics, Springer, vol. 18(3), pages 365-385, December.
    6. Stenborg, Markku, 2002. "Economics of Joint Dominance," Discussion Papers 834, The Research Institute of the Finnish Economy.
    7. Andreas Nicklisch, 2012. "Does collusive advertising facilitate collusive pricing? Evidence from experimental duopolies," European Journal of Law and Economics, Springer, vol. 34(3), pages 515-532, December.
    8. Clark, Derek J. & Jørgensen, Finn & Mathisen, Terje Andreas, 2011. "Relationships between fares, trip length and market competition," Transportation Research Part A: Policy and Practice, Elsevier, vol. 45(7), pages 611-624, August.

    More about this item

    Keywords

    DEREGULATION ; MARKET STRUCTURE ; ECONOMETRICS ; COMPETITION;

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation

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