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Do Horizontal Mergers Induce Entry? Evidence from the U.S. Airline Industry

Author

Listed:
  • Patrice Bougette

    (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (1965 - 2019) - CNRS - Centre National de la Recherche Scientifique - UniCA - Université Côte d'Azur)

  • Kai Hüschelrath

    (Centre for European Economic Research (Mannheim, Germany) - Zentrum für Europäische Wirtschaftsforschung (ZEW) - Universität Mannheim, MaCCI - Mannheim Centre for Competition and Innovation)

  • Kathrin Müller

    (Centre for European Economic Research (Mannheim, Germany) - Zentrum für Europäische Wirtschaftsforschung (ZEW) - Universität Mannheim, MaCCI - Mannheim Centre for Competition and Innovation)

Abstract

Theoretical research has investigated the relevance of entry-inducing effects as countervailing factor to a merger-related increase in market power.We use route level data for the America West Airlines-US Airways merger (2005) to investigate whether such an effect can be identified empirically. Our results show that both entry-inducing and entry-dissuading effects can be observed depending on the type of affected route and the carrier under investigation.

Suggested Citation

  • Patrice Bougette & Kai Hüschelrath & Kathrin Müller, 2014. "Do Horizontal Mergers Induce Entry? Evidence from the U.S. Airline Industry," Post-Print halshs-00859331, HAL.
    • Handle: RePEc:hal:journl:halshs-00859331
    DOI: 10.1080/13504851.2013.835473
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    References listed on IDEAS

    as
    1. Anthony M. Marino & Ján Zábojník, 2006. "Merger, Ease Of Entry And Entry Deterrence In A Dynamic Model," Journal of Industrial Economics, Wiley Blackwell, vol. 54(3), pages 397-423, September.
    2. Spector, David, 2003. "Horizontal mergers, entry, and efficiency defences," International Journal of Industrial Organization, Elsevier, vol. 21(10), pages 1591-1600, December.
    3. Cabral, Luis M. B., 2003. "Horizontal mergers with free-entry: why cost efficiencies may be a weak defense and asset sales a poor remedy," International Journal of Industrial Organization, Elsevier, vol. 21(5), pages 607-623, May.
    4. repec:bla:jindec:v:46:y:1998:i:4:p:525-43 is not listed on IDEAS
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    More about this item

    Keywords

    merger; Airline industry; entry-inducing effects;
    All these keywords.

    JEL classification:

    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General

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