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Airline market power and intertemporal price dispersion
preprint
posted on 2009-08-13, 08:15 authored by Alberto A. Gaggero, Claudio PigaThis paper analyzes the empirical relationship between market structure and price dispersion in the airline markets connecting the UK and the Republic of Ireland. Price dispersion is measured by a number of inequality indexes, calculated using fares posted on the Internet at specific days before takeoff. We find a negative correlation between market dominance and price dispersion; thus competition appears to hinder the airlines' ability to price discriminate to exploit consumers' heterogeneity in booking time preferences. Moreover, in the Christmas and Easter periods of high demand, fares are less dispersed, possibly because airlines target a less heterogenous set of consumers.
History
School
- Business and Economics
Department
- Economics
Publisher
© Loughborough UniversityVersion
- AM (Accepted Manuscript)
Publication date
2009Notes
This is a working paper. It is also available at: http://ideas.repec.org/p/lbo/lbowps/2009_10.htmlISSN
1750-4171Book series
Loughborough University. Department of Economics. Discussion Paper Series;WP 2009 - 10Language
- en