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On the Absence of Directional Price Discrimination in the U.S. Airline Industry
Ist Teil von
The Journal of industrial economics, 2020-09, Vol.68 (3), p.556-581
Ort / Verlag
Oxford: Wiley Subscription Services, Inc
Erscheinungsjahr
2020
Link zum Volltext
Quelle
PAIS Index
Beschreibungen/Notizen
Certain forms of price discrimination in oligopoly markets can lead to more aggressive competition and lower profits, yet few empirical studies examine how extensively such strategies are used. I consider one such strategy, testing whether airlines charge different prices on the same flights to passengers that originate from different endpoints. Using fare quote data I formulate a new approach to measure discrimination while controlling for cost heterogeneity and find that carriers within the U.S. domestic market do not engage in directional price discrimination despite frequently using other similar pricing strategies that are unlikely to enhance competition.