Siegert, Caspar and Ulbricht, Robert (2014) Dynamic Oligopoly Pricing: Evidence from the Airline Industry. TSE Working Paper, n. 14-478

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We explore how pricing dynamics in the European airline industry vary with competition and document patterns that are consistent with intertemporal price discrimination. First, the rate at which prices increase over time decreases in competition, supporting the idea that competition restrains the ability of airlines to price-discriminate against late-arriving customers. Second, the sensitivity to competition increases in the heterogeneity of the customer base, reflecting that restraints on price discrimination are only relevant when there is initial scope for discrimination. The patterns explain 83 percent of the observed within-flight price dispersion and 17 percent of the cross-market variation in pricing dynamics.

Item Type: Monograph (Working Paper)
Language: English
Date: March 2014
Uncontrolled Keywords: Airline industry, capacity constraints, dynamic oligopoly pricing, intertemporal price dispersion, price discrimination
JEL Classification: D43 - Oligopoly and Other Forms of Market Imperfection
D92 - Intertemporal Firm Choice and Growth, Investment, or Financing
L11 - Production, Pricing, and Market Structure; Size Distribution of Firms
L93 - Air Transportation
Divisions: TSE-R (Toulouse)
Institution: Université Toulouse Capitole
Site: UT1
Date Deposited: 09 Jul 2014 17:43
Last Modified: 27 Oct 2021 13:36
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