Corporate Failure, Supply Shocks and Government Bailouts: A Case Study of Aloha Airlines
This paper investigates the bankruptcy of Aloha Airlines and its exit from Hawaii’s interisland passenger market in order to examine whether government intervention is warranted based on the presumed benefits to the general public. A regression analysis of interisland traffic volume does not identify any substantial decline in interisland passengers immediately following Aloha’s closure. A government’s decision to bailout a firm should incorporate information on market structure, as the presence of excess capacity can alleviate damage to consumers.
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- James C. Cox, 2009.
"Some Issues of Methods, Theories, and Experimental Designs,"
Experimental Economics Center Working Paper Series
2009-02, Experimental Economics Center, Andrew Young School of Policy Studies, Georgia State University.
- Cox, James C., 2010. "Some issues of methods, theories, and experimental designs," Journal of Economic Behavior & Organization, Elsevier, vol. 73(1), pages 24-28, January.
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