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Please use this identifier to cite or link to this item: https://dspace.lboro.ac.uk/2134/2769

Title: Pricing strategies by European low cost carriers
Authors: Piga, Claudio
Bachis, Enrico
Keywords: Law of One Price
Sample selection
On-line pricing
Dispersion
Airlines
Exchange rate
Issue Date: 2007
Abstract: We introduce an on-line pricing tactic where airlines post, at the same time and for the same flight, fares in different currencies that violate the law of One Price. Unexpectedly for an on-line market, we find that price discrimination may be accompanied by arbitrage opportunities and that both tend to persist before a flight’s departure. We find discrimination to be of a competitive type, although arbitrage opportunities are more likely in concentrated routes. Finally, the evidence suggests that discrimination may be used to manage stochastic demand.
Description: This is a working paper. It is also available at: http://ideas.repec.org/p/lbo/lbowps/2007_10.html.
URI: https://dspace.lboro.ac.uk/2134/2769
ISSN: 1750-4171
Appears in Collections:Working Papers (Economics)

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