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Identifying airline price discrimination and the effect of competition
Ist Teil von
International journal of industrial organization, 2021-09, Vol.78, p.102761, Article 102761
Ort / Verlag
Elsevier B.V
Erscheinungsjahr
2021
Link zum Volltext
Quelle
Alma/SFX Local Collection
Beschreibungen/Notizen
•Airline price discrimination identified using customized data collection approach.•Product heterogeneity alters the impact of competition on price discrimination.•Quote-based strategy eliminates potential bias from unobserved cost variation.
Empirical studies exploring the relationship between competition and price discrimination don’t generally consider the role of product differentiation or the asymmetric adoption of discrimination across firms. Using a customized empirical approach to examine the use of Saturday-night stayover discounts in the U.S. airline industry, I show that discounts are used more often when facing competitors that offer differentiated products but less often when competing with firms that don’t use discounts. Legacy carriers rarely use discounts when competing with Southwest or other low-cost carriers, but the presence of competing legacy carriers sometimes enhances the use of discounts.