Refundability and Price: Empirical Analysis on the Airline Industry
This paper provides new evidence on price dispersion in the US airline industry. Using the observed fare differences between refundable and non-refundable tickets, we first document evidence on the prices passengers pay for a refund option. We find that the factors related to the value of refund option and customers¡¯ individual demand uncertainty have a significant effect on the relative refund fares. This finding is robust for various market structures. Further, taking into account the variations of the relative refund fares, we investigate the effects of market structure on price dispersion.
|Date of creation:||2011|
|Date of revision:|
|Contact details of provider:|| Postal: 1 Sinsu-dong, Mapo-gu, Seoul 121-742|
Web page: http://home.sogang.ac.kr/sites/sgrime
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Nocke, Volker & Peitz, Martin, 2008.
"Advance-Purchase Discounts as a Price Discrimination Device,"
CEPR Discussion Papers
6664, C.E.P.R. Discussion Papers.
- Nocke, Volker & Peitz, Martin & Rosar, Frank, 2011. "Advance-purchase discounts as a price discrimination device," Journal of Economic Theory, Elsevier, vol. 146(1), pages 141-162, January.
- Pascal Courty & Li Hao, 2000.
Review of Economic Studies,
Oxford University Press, vol. 67(4), pages 697-717.
- Alberto A. Gaggero & Claudio A. Piga, 2009.
"Airline Market Power and Intertemporal Price Dispersion,"
Discussion Paper Series
2009_10, Department of Economics, Loughborough University, revised Jul 2009.
- Alberto A. Gaggero & Claudio A. Piga, 2011. "Airline Market Power and Intertemporal Price Dispersion," Journal of Industrial Economics, Wiley Blackwell, vol. 59(4), pages 552-577, December.
- James D. Dana & Jr., 1998. "Advance-Purchase Discounts and Price Discrimination in Competitive Markets," Journal of Political Economy, University of Chicago Press, vol. 106(2), pages 395-422, April.
- Courty, Pascal, 2002.
"Ticket Pricing Under Demand Uncertainty,"
CEPR Discussion Papers
3443, C.E.P.R. Discussion Papers.
- Dana, James D, Jr, 2001. "Monopoly Price Dispersion under Demand Uncertainty," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 42(3), pages 649-70, August.
- Severin Borenstein & Nancy L. Rose, 1991.
"Competition and Price Dispersion in the U.S. Airline Industry,"
NBER Working Papers
3785, National Bureau of Economic Research, Inc.
- Borenstein, Severin & Rose, Nancy L, 1994. "Competition and Price Dispersion in the U.S. Airline Industry," Journal of Political Economy, University of Chicago Press, vol. 102(4), pages 653-83, August.
- Escobari, Diego & Jindapon, Paan, 2014.
"Price discrimination through refund contracts in airlines,"
International Journal of Industrial Organization,
Elsevier, vol. 34(C), pages 1-8.
- Escobari, Diego & Jindapon, Paan, 2014. "Price Discrimination through Refund Contracts in Airlines," MPRA Paper 53629, University Library of Munich, Germany.
- Manuel A. Hernandez & Steven N. Wiggins, 2014. "Nonlinear Pricing Strategies And Competitive Conditions In The Airline Industry," Economic Inquiry, Western Economic Association International, vol. 52(2), pages 539-561, 04.
- Gale, Ian L & Holmes, Thomas J, 1993.
"Advance-Purchase Discounts and Monopoly Allocation of Capacity,"
American Economic Review,
American Economic Association, vol. 83(1), pages 135-46, March.
- Gale, I.L. & Holmes, T.J., 1990. "Advance-Purchase Discounts And Monopoly Allocation Of Capacity," Working papers 9005, Wisconsin Madison - Social Systems.
- Kristopher S. Gerardi & Adam Hale Shapiro, 2009. "Does Competition Reduce Price Dispersion? New Evidence from the Airline Industry," Journal of Political Economy, University of Chicago Press, vol. 117(1), pages 1-37, 02.
- Marc Möller & Makoto Watanabe, 2010. "Advance Purchase Discounts Versus Clearance Sales," Economic Journal, Royal Economic Society, vol. 120(547), pages 1125-1148, 09.
- Steven L. Puller & Anirban Sengupta & Steven N. Wiggins, 2009. "Testing Theories of Scarcity Pricing in the Airline Industry," NBER Working Papers 15555, National Bureau of Economic Research, Inc.
When requesting a correction, please mention this item's handle: RePEc:sgo:wpaper:1107. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (In Choi)
If references are entirely missing, you can add them using this form.