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Duopoly in the Japanese Airline Market: Bayesian Estimation for the Entry Game

Author

Listed:
  • Shinya Sugawara

    (Graduate School of Economics, University of Tokyo)

  • Yasuhiro Omori

    (Faculty of Economics, University of Tokyo)

Abstract

This paper provides an econometric analysis on a duopoly game in the Japanese domestic airline market. We establish a novel Bayesian estimation approach for the entry game, which is free from the conventional identification problem and thus allows the incorporation of flexible inference techniques. We find asymmetric strategic interactions between Japanese firms, which implies that competition will still be influenced by the former regulation regime. Furthermore, our prediction analysis indicates that the new Shizuoka airport will suffer from a lack of demand.

Suggested Citation

  • Shinya Sugawara & Yasuhiro Omori, 2010. "Duopoly in the Japanese Airline Market: Bayesian Estimation for the Entry Game," CIRJE F-Series CIRJE-F-763, CIRJE, Faculty of Economics, University of Tokyo.
  • Handle: RePEc:tky:fseres:2010cf763
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    Cited by:

    1. Yuko Onishi & Yasuhiro Omori, 2016. "Bayesian Estimation of Entry Games with Multiple Players and Multiple Equilibria," The Japanese Economic Review, Springer, vol. 67(4), pages 418-440, December.
    2. Shinya Sugawara, 2013. "An Interval Regression Analysis for Tenures of Japanese Elder Care Workers Using Matched Employer-Employee Data," CIRJE F-Series CIRJE-F-887, CIRJE, Faculty of Economics, University of Tokyo.
    3. Shinya Sugawara & Yasuhiro Omori, 2013. "An Econometric Analysis of Insurance Markets with Separate Identification for Moral Hazard and Selection," CIRJE F-Series CIRJE-F-882, CIRJE, Faculty of Economics, University of Tokyo.
    4. Yuko Onishi & Yasuhiro Omori, 2014. "Bayesian Estimation of Entry Games with Multiple Players and Multiple Equilibria," CIRJE F-Series CIRJE-F-943, CIRJE, Faculty of Economics, University of Tokyo.
    5. Shinya Sugawara & Yasuhiro Omori, 2017. "An Econometric Analysis of Insurance Markets with Separate Identification for Moral Hazard and Selection Problems," Computational Economics, Springer;Society for Computational Economics, vol. 50(3), pages 473-502, October.
    6. Naoshi DOI & Hiroshi OHASHI, 2015. "An Airline Merger and its Remedies: JAL-JAS of 2002," Discussion papers 15100, Research Institute of Economy, Trade and Industry (RIETI).

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