Airline Economics: An Empirical Analysis of Market Structure by Giovanni Alberto Tabacco

By Giovanni Alberto Tabacco

This ebook provides an unique empirical research of the marketplace constitution of airline urban pair markets, laying off new mild at the workings of aggressive techniques among organisations. interpreting a cross-section people airline urban pairs, Tabacco proposes for the 1st time that the will be understood as a normal oligopoly, every one airline marketplace being ruled through one to 3 airline vendors despite marketplace dimension. the writer questions the level to which airways intentionally hinder head-to-head festival inside urban pair markets, and attracts interesting conclusions approximately aggressive forces from the saw marketplace constitution. Uncovering many of the major company thoughts of the airline undefined, the ebook is of fast relevance to managers and practitioners, in addition to educational economists.

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Airline Economics: An Empirical Analysis of Market Structure and Competition in the US Airline Industry

This ebook offers an unique empirical research of the marketplace constitution of airline urban pair markets, laying off new gentle at the workings of aggressive strategies among corporations. reading a cross-section folks airline urban pairs, Tabacco proposes for the 1st time that the should be understood as a traditional oligopoly, each one airline marketplace being ruled through one to 3 airline companies despite marketplace dimension.

Additional resources for Airline Economics: An Empirical Analysis of Market Structure and Competition in the US Airline Industry

Sample text

7. I report only the marginal effects, because those are enough to understand competition. Market size appears positive and significant only for American Airlines, whilst the evidence suggests not significant marginal effects for all the other airlines. I have evidence of negative and significant marginal effect for the variable Distance regarding Southwest, Continental, and non-leaders; in contrast, we have evidence of positive and significant marginal effect for Delta Airlines and United Airlines.

Werden, G. (1993). Endogenous in the concentrationprice relationship: Causes, consequences, and cures. Journal of Industrial Economics, 41, 431–438. , & Kessides, I. (1993). S. Airline industry. Review of Economics and Statistics, 75, 66–75. Finnamore, R. (2014, January) Aviation perspectives – The impact of megamergers: A new foundation for the US airline industry. PricewaterhouseCoopers. Forbes, S. J. (2008a). The effect of air traffic delays on airline prices. International Journal of Industrial Organization, 26, 1218–1232.

In this present context, airline carriers appear to use airport presence as a competitive weapon with which product quality increases. In addition, the finding of the maximal level of concentration constant at any market size, as given by fact 1 above, is supported by a class of models encompassing horizontal product differentiation: (1) theoretical models of multi-product firms entering sequentially, therefore filling all profitable niches by product proliferation (Schmalensee 1978); (2) of monopolist’s location choice (Bonanno 1987); (3) explanations of local monopolies (Prescott and Visscher 1977; Eaton and Lipsey 1979; Reynolds 1987).

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