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An effect of consumer's earlier decision to purchase a discount ticket

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  • Ishii, Ryosuke
  • Nakagawa, Kuninori

Abstract

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.

Suggested Citation

  • Ishii, Ryosuke & Nakagawa, Kuninori, 2011. "An effect of consumer's earlier decision to purchase a discount ticket," ビジネス創造センターディスカッション・ペーパー (Discussion papers of the Center for Business Creation) 10252/4502, Otaru University of Commerce.
  • Handle: RePEc:ota:busdis:10252/4502
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    References listed on IDEAS

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    7. d'Aspremont, C & Gabszewicz, Jean Jaskold & Thisse, J-F, 1979. "On Hotelling's "Stability in Competition"," Econometrica, Econometric Society, vol. 47(5), pages 1145-1150, September.
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    9. Greenhut,Melvin L. & Norman,George & Hung,Chao-Shun, 1987. "The Economics of Imperfect Competition," Cambridge Books, Cambridge University Press, number 9780521305525, May.
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