An effect of consumer's earlier decision to purchase a discount ticket
In this article, we consider how effect consumer's earlier decision to purchase a discount ticket will have on the competition, price and timetable, between airlines. We focus on a relationship between consumer's purchasing behavior and a competition between airlines. We consider that a consumer can purchase a ticket two times, i.e. ex-ante and ex-post, corresponding to this timing, airlines also can set their prices of tickets. The main conclusion highlighted by this article is that, in a subgame perfect equilibrium, each airline's expected profit is unique and timetable is socially optimal regardless to a consumer's purchasing behavior.
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|Date of creation:||14 Feb 2011|
|Publication status:||Published in Discussion paper series (2011), 131: 1-8|
|Contact details of provider:|| Postal: 3-5-21 Midori, Otaru, 047-8501|
Web page: http://www.otaru-uc.ac.jp/dept/econ/
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- Alberto Gaggero & Claudio A. Piga, 2008. "Airline Competition in the British Isles," Discussion Paper Series 2008_12, Department of Economics, Loughborough University, revised Oct 2008.
- Salvanes, Kjell G. & Steen, Frode & Sorgard, Lars, 2005. "Hotelling in the air? Flight departures in Norway," Regional Science and Urban Economics, Elsevier, vol. 35(2), pages 193-213, March.
- Encaoua, David & Moreaux, Michel & Perrot, Anne, 1996. "Compatibility and competition in airlines demand side network effects," International Journal of Industrial Organization, Elsevier, vol. 14(6), pages 701-726, October.
- Encacoua, D. & Moreaux, M. & Perrot, A., 1995. "Compatibility and Competition in Airlines: Demand Side Network Effect," Papiers d'Economie MathÃ©matique et Applications 95.21, UniversitÃ© PanthÃ©on-Sorbonne (Paris 1).
- Jan Brueckner & Ricardo Flores-Fillol, 2007. "Airline Schedule Competition," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 30(3), pages 161-177, May.
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