subject:(Airlines Price)

University of Hong Kong

1. Pies, John David. Price discrimination versus the search for market information in the airline pricing dilemma.

Degree: 1995, University of Hong Kong

URL: http://hdl.handle.net/10722/40720

Subjects/Keywords: Price discrimination.; Airlines - Rates.

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APA (6^th Edition):

Pies, J. D. (1995). Price discrimination versus the search for market information in the airline pricing dilemma. (Thesis). University of Hong Kong. Retrieved from http://hdl.handle.net/10722/40720

Note: this citation may be lacking information needed for this citation format:
Not specified: Masters Thesis or Doctoral Dissertation

Chicago Manual of Style (16^th Edition):

Pies, John David. “Price discrimination versus the search for market information in the airline pricing dilemma.” 1995. Thesis, University of Hong Kong. Accessed January 22, 2021. http://hdl.handle.net/10722/40720.

Note: this citation may be lacking information needed for this citation format:
Not specified: Masters Thesis or Doctoral Dissertation

MLA Handbook (7^th Edition):

Pies, John David. “Price discrimination versus the search for market information in the airline pricing dilemma.” 1995. Web. 22 Jan 2021.

Vancouver:

Pies JD. Price discrimination versus the search for market information in the airline pricing dilemma. [Internet] [Thesis]. University of Hong Kong; 1995. [cited 2021 Jan 22]. Available from: http://hdl.handle.net/10722/40720.

Note: this citation may be lacking information needed for this citation format:
Not specified: Masters Thesis or Doctoral Dissertation

Council of Science Editors:

Pies JD. Price discrimination versus the search for market information in the airline pricing dilemma. [Thesis]. University of Hong Kong; 1995. Available from: http://hdl.handle.net/10722/40720

Note: this citation may be lacking information needed for this citation format:
Not specified: Masters Thesis or Doctoral Dissertation

2. Belova, Alexandra. Estimation of consumer demand on the air transport market : Estimation de la demande des consommateurs sur le marché du transport aérien.

Degree: Docteur es, Économie, 2018, Paris 1

URL: http://www.theses.fr/2018PA01E040

►

Une des particularités du marché des compagnies aériennes est la grande divergence des prix des billets pour les mêmes vol. Cela reflète principalement l'incapacité des… (more)

▼

Une des particularités du marché des compagnies aériennes est la grande divergence des prix des billets pour les mêmes vol. Cela reflète principalement l'incapacité des entreprises à modifier facilement les volumes de production et/ou à les stocker. Le développement et l'utilisation des modèles de "yield management" (modèles d'attribution des sièges) ont été centrés sur les compagnies aériennes proposant différents types de tarifs pour un même vol. L'objectif de cette thèse est de construire un certain nombre de modèles économiques pour expliquer la dispersion des prix sur le marché du transport aérien à partir de différents points de vue. Dans le chapitre 3, je crée un modèle de prix direct qui explique comment différentes caractéristiques du produit et du consommateur influencent le niveau de prix. Le chapitre 4 est consacré aux différences de niveau de prix du point de vue de la concurrence. Dans un jeu stratégique où les entreprises se font concurrence, ! 'ensemble de stratégies rationalisables pour chaque joueur implique toutes les meilleures réponses aux décisions des autres. Ce chapitre propose un test empirique de l'existence de l'équilibre de Nash unique dans un oligopole de Cournot. Dans le chapitre 5, je traite le marché des passagers aériens comme un marché différenciant les produits et applique un modèle logit multinomial pour calculer les élasticités-prix. Le modèle logit (mettant particulièrement l'accent sur l'hétérogénéité des consommateurs) estime de quelle manière les différentes caractéristiques du produit influencent les parts de marché.

Nowadays one of peculiarities of the liberalized airline market is a huge divergence of ticket prices for the same flights. Mostly it reflects the companies' being unable to easily change the volumes of production or/and store them. The development and use of the yield management models (seat allocation models) have centered on airlines offering a variety of different types of fares for travel on the same flight. The goal of this dissertation is to construct a number of economic models to explain the price dispersion on the airline market from the different points of view. In Part 3, I create a direct price mode! which explains how different product and consumer characteristics influence the price level. It is shown how different attributes like the moment of ticket reservation, ticket class, weekday of the departure and number of coupons define the price and how it corresponds to the consumer characteristics (gender, income, age, etc.). Part 4 is devoted to the differences of the price level from the competition point of view. In a strategic game where firms compete against each other the set of rationalizable strategies for each player entails ail the best responses to the others' decisions. This chapter proposes an empirical test of the existence of the unique Nash equilibrium in a Cournot oligopoly. In Part 5 I treat an airline passenger market as a market with the product differentiation and apply a multinomial logit model to calculate price elasticities.…

Advisors/Committee Members: Gagnepain, Philippe (thesis director).

Subjects/Keywords: Airlines; Concurrence; Politique des prix; Stabilité de marché; Demande; Fonction de prix hédonique; Cournot; Équilibre de Nash; Élasticités des prix; Airlines; Competition; Demand; Cournot; Nash equilibrium; Price policies; Costs; Hedonic price function; Price elasticities; 330

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APA (6^th Edition):

Belova, A. (2018). Estimation of consumer demand on the air transport market : Estimation de la demande des consommateurs sur le marché du transport aérien. (Doctoral Dissertation). Paris 1. Retrieved from http://www.theses.fr/2018PA01E040

Chicago Manual of Style (16^th Edition):

Belova, Alexandra. “Estimation of consumer demand on the air transport market : Estimation de la demande des consommateurs sur le marché du transport aérien.” 2018. Doctoral Dissertation, Paris 1. Accessed January 22, 2021. http://www.theses.fr/2018PA01E040.

MLA Handbook (7^th Edition):

Belova, Alexandra. “Estimation of consumer demand on the air transport market : Estimation de la demande des consommateurs sur le marché du transport aérien.” 2018. Web. 22 Jan 2021.

Vancouver:

Belova A. Estimation of consumer demand on the air transport market : Estimation de la demande des consommateurs sur le marché du transport aérien. [Internet] [Doctoral dissertation]. Paris 1; 2018. [cited 2021 Jan 22]. Available from: http://www.theses.fr/2018PA01E040.

Council of Science Editors:

Belova A. Estimation of consumer demand on the air transport market : Estimation de la demande des consommateurs sur le marché du transport aérien. [Doctoral Dissertation]. Paris 1; 2018. Available from: http://www.theses.fr/2018PA01E040

Jönköping University

3. Havik, Jonathan; Stendahl, Emil. Commodity Risk Management in The Airline Industry : A study from Europe.

Degree: Business Administration, 2016, Jönköping University

URL: http://urn.kb.se/resolve?urn=urn:nbn:se:hj:diva-30346

► The airline industry is a major user of jet fuel and this constitutes a large component of the operating costs and is a risk… (more)

Subjects/Keywords: Airlines; Europe; Systematic risk; Hedging; Oil prices; Oil price volatility; Jet fuel hedging; Business Administration; Företagsekonomi

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APA (6^th Edition):

Havik, Jonathan; Stendahl, E. (2016). Commodity Risk Management in The Airline Industry : A study from Europe. (Thesis). Jönköping University. Retrieved from http://urn.kb.se/resolve?urn=urn:nbn:se:hj:diva-30346

Note: this citation may be lacking information needed for this citation format:
Not specified: Masters Thesis or Doctoral Dissertation

Chicago Manual of Style (16^th Edition):

Havik, Jonathan; Stendahl, Emil. “Commodity Risk Management in The Airline Industry : A study from Europe.” 2016. Thesis, Jönköping University. Accessed January 22, 2021. http://urn.kb.se/resolve?urn=urn:nbn:se:hj:diva-30346.

Note: this citation may be lacking information needed for this citation format:
Not specified: Masters Thesis or Doctoral Dissertation

MLA Handbook (7^th Edition):

Havik, Jonathan; Stendahl, Emil. “Commodity Risk Management in The Airline Industry : A study from Europe.” 2016. Web. 22 Jan 2021.

Vancouver:

Havik, Jonathan; Stendahl E. Commodity Risk Management in The Airline Industry : A study from Europe. [Internet] [Thesis]. Jönköping University; 2016. [cited 2021 Jan 22]. Available from: http://urn.kb.se/resolve?urn=urn:nbn:se:hj:diva-30346.

Note: this citation may be lacking information needed for this citation format:
Not specified: Masters Thesis or Doctoral Dissertation

Council of Science Editors:

Havik, Jonathan; Stendahl E. Commodity Risk Management in The Airline Industry : A study from Europe. [Thesis]. Jönköping University; 2016. Available from: http://urn.kb.se/resolve?urn=urn:nbn:se:hj:diva-30346

Note: this citation may be lacking information needed for this citation format:
Not specified: Masters Thesis or Doctoral Dissertation

Indian Institute of Science

4. Mazumdar, Chandra Sen. Seat Allocation And Pricing in a Duopoly in The Airline Industry.

Degree: PhD, Faculty of Engineering, 2017, Indian Institute of Science

URL: http://etd.iisc.ac.in/handle/2005/2721

► Revenue Management (RM) is the practice of managing perishable assets by control-ling their availability and/or prices with an objective to maximize the total revenue. Seat… (more)

▼ Revenue Management (RM) is the practice of managing perishable assets by control-ling their availability and/or prices with an objective to maximize the total revenue. Seat inventory allocation falls in the purview of quantity-based RM. The liberalization of the aviation sector and the subsequent entrance of the low-cost carriers saw an ever-increasing customer base for the airline industry. Given the large number of buyers, firms were free to decide the price at which they would sell tickets. The low-cost carriers started to follow a third degree price discrimination and segmentation of the market, charging a higher price to the market with a relatively inelastic demand. Although a lot of work has been done in the area of seat inventory allocation under a monopolistic market scenario, we realized that not a lot of work had been done in a competitive market scenario. This thesis considers the problem of seat inventory allocation and pricing in a duopoly where each of the competing airlines have two fare-classes. We consider the possibility that the same fare-class may be priced differently by the two competing airlines and allow for the over flow of passengers between the airlines in the same fare-class. In the first part of our work, we develop a non-linear mathematical model for setting the booking limits for one of the two competing air-lines such that the revenue earned is maximized. We consider over flow of passengers from one airline to another in the same fare-class in response to a price differential and compare the results obtained from our model with the standard Expected Marginal Seat Revenue (EMSR) model under a monopolistic scenario. The results show that our model gives higher revenues than that obtained from the EMSR model. In the second part of our work, we consider a non-cooperative game between two competing airlines with price cutting as the strategy to increase their demand. Through numerical computations, we identify the pure strategy Nash equilibrium. From the results, we conclude that Nash equilibrium is achieved only when both the airlines follow the same pricing strategy indicating that individual price cutting will not be beneficial. This also indicates that unless the competitors enter into a cooperative coalition with each other, they would not benefit from deep discount offers. In the third and final part, we prove theoretically the existence of pure strategy Nash equilibrium in a two airline, two fare-class problem with price sensitive over flow of customers in the same fare-class that was computationally analysed earlier. The strategy / strategies at which Nash equilibrium is achieved are identified. We show that Nash equilibrium is only achieved when both the airlines price identically. Hence, our thesis concludes that differential pricing does not hold any significance for the competing airlines from an operational perspective. Advisors/Committee Members: Ramachandran, Parthasarathy (advisor).

Subjects/Keywords: Airline Revenue Management; Duopoly Markets; Airport Passenger Overflow Management; Differential Pricing; Nash Equilibrium; Airline Industry; Airlines Rates; Airlines; Expected Marginal Seat Revenue (EMSR) Model; Game Theoretic Models; Airline Duopoly; Airlines Price; Seat Allocation; Management

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APA · Chicago · MLA · Vancouver · CSE | Export to Zotero / EndNote / Reference Manager

APA (6^th Edition):

Mazumdar, C. S. (2017). Seat Allocation And Pricing in a Duopoly in The Airline Industry. (Doctoral Dissertation). Indian Institute of Science. Retrieved from http://etd.iisc.ac.in/handle/2005/2721

Chicago Manual of Style (16^th Edition):

Mazumdar, Chandra Sen. “Seat Allocation And Pricing in a Duopoly in The Airline Industry.” 2017. Doctoral Dissertation, Indian Institute of Science. Accessed January 22, 2021. http://etd.iisc.ac.in/handle/2005/2721.

MLA Handbook (7^th Edition):

Mazumdar, Chandra Sen. “Seat Allocation And Pricing in a Duopoly in The Airline Industry.” 2017. Web. 22 Jan 2021.

Vancouver:

Mazumdar CS. Seat Allocation And Pricing in a Duopoly in The Airline Industry. [Internet] [Doctoral dissertation]. Indian Institute of Science; 2017. [cited 2021 Jan 22]. Available from: http://etd.iisc.ac.in/handle/2005/2721.

Council of Science Editors:

Mazumdar CS. Seat Allocation And Pricing in a Duopoly in The Airline Industry. [Doctoral Dissertation]. Indian Institute of Science; 2017. Available from: http://etd.iisc.ac.in/handle/2005/2721

5. Tan, Kerria Measkhan. Essays on Strategic Behavior in the U.S. Airline Industry.

Degree: PhD, Economics, 2012, The Ohio State University

URL: http://rave.ohiolink.edu/etdc/view?acc_num=osu1337707288

► In my first dissertation essay, "Incumbent Response to Entry by Low-Cost Carriers in the U.S. Airline Industry," I analyze the price response of incumbents… (more)

▼ In my first dissertation essay, "Incumbent Response to Entry by Low-Cost Carriers in the U.S. Airline Industry," I analyze the price response of incumbents to entry by low-cost carriers in the U.S. airline industry. Previous theoretical papers suggest that airlines might respond to entry by lowering prices to compete harder for existing customers or they might increase prices to exploit their brand-loyal customers. This paper tests which effect is more prominent in the airline industry. I find that when one of four low-cost carriers enters a particular route, legacy carrier incumbents respond differently than low-cost carrier incumbents to new low-cost carrier entry. Legacy carriers decrease their mean airfare, 10th percentile airfare, and 90th percentile airfare before and after entry by a low-cost carrier. However, low-cost carriers do not significantly alter their pricing strategy. The differing incumbent responses can be attributed to the finding that low-cost carrier entrants tend to match the price set by rival low-cost carriers in the quarter of entry and tend to enter with a lower price than that of legacy carrier incumbents. The results also suggest that entry does not affect price dispersion by incumbent carriers. Legacy carriers have increasingly outsourced the operation of certain routes to regional airlines over the past decade. My second dissertation essay, "The Influence of Low-Cost Carriers on the Use of Regional Airlines," investigates how low-cost carriers influence where legacy carriers decide to use regional airlines. I find evidence that legacy carriers are more inclined to switch to regional airlines on routes where a low-cost carrier exists. Moreover, legacy carriers tend to not only decrease average airfares once they start outsourcing but also price match competing low-cost carriers. However, I do not find evidence that low-cost carriers are effectively deterred from entering routes where a regional airline is present. The results refute the notion that regional airlines can serve as an effective barrier to entry, while suggesting that legacy carriers exploit the more cost-efficient regional airlines in order to lower price and therefore better compete with low-cost carriers. My third and final dissertation essay, "The Effect of De-Hubbing on Airfares," studies the price effect of de-hubbing, which occurs when an airline ceases hub operations at an airport. Legacy carriers dramatically decrease both the frequency of flights and the number of seats offered once it de-hubs an airport, whereas their competitors generally respond by maintaining their capacity level at the airport. As a result, prices could potentially decrease as the market becomes less concentrated or increase because the de-hubbing airline's capacity reduction diminishes the availability of substitutes. I perform an event study using four cases of de-hubbing at domestic airports between 2001 and 2006 to test which price effect dominates. Not only do average airfares increase after a legacy carrier de-hubs an… Advisors/Committee Members: Lewis, Matthew (Advisor).

Subjects/Keywords: Economics; airlines; entry; outsourcing; de-hubbing; price competition; legacy carriers; low-cost carriers; regional airlines

…competition is the same for all airlines, while I allow the effect of entry on price dispersion to… …x5B;33] both document evidence that incumbents decrease price when Southwest Airlines… …in the quarter of entry. For example, Southwest Airlines enters at an average price that is… …Airlines sets a price that is at least $20 higher than the average price set by United Airlines… …Airways is an incumbent, Southwest Airlines ends up setting an average price that is within $20…

10 more images…

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APA · Chicago · MLA · Vancouver · CSE | Export to Zotero / EndNote / Reference Manager

APA (6^th Edition):

Tan, K. M. (2012). Essays on Strategic Behavior in the U.S. Airline Industry. (Doctoral Dissertation). The Ohio State University. Retrieved from http://rave.ohiolink.edu/etdc/view?acc_num=osu1337707288

Chicago Manual of Style (16^th Edition):

Tan, Kerria Measkhan. “Essays on Strategic Behavior in the U.S. Airline Industry.” 2012. Doctoral Dissertation, The Ohio State University. Accessed January 22, 2021. http://rave.ohiolink.edu/etdc/view?acc_num=osu1337707288.

MLA Handbook (7^th Edition):

Tan, Kerria Measkhan. “Essays on Strategic Behavior in the U.S. Airline Industry.” 2012. Web. 22 Jan 2021.

Vancouver:

Tan KM. Essays on Strategic Behavior in the U.S. Airline Industry. [Internet] [Doctoral dissertation]. The Ohio State University; 2012. [cited 2021 Jan 22]. Available from: http://rave.ohiolink.edu/etdc/view?acc_num=osu1337707288.

Council of Science Editors:

Tan KM. Essays on Strategic Behavior in the U.S. Airline Industry. [Doctoral Dissertation]. The Ohio State University; 2012. Available from: http://rave.ohiolink.edu/etdc/view?acc_num=osu1337707288

Texas A&M University

6. Escobari Urday, Diego Alfonso. Essays on pricing under uncertainty.

Degree: PhD, Economics, 2008, Texas A&M University

URL: http://hdl.handle.net/1969.1/85918

► This dissertation analyzes pricing under uncertainty focusing on the U.S. airline industry. It sets to test theories of price dispersion driven by uncertainty in the… (more)

▼ This dissertation analyzes pricing under uncertainty focusing on the U.S. airline industry. It sets to test theories of price dispersion driven by uncertainty in the demand by taking advantage of very detailed information about the dynamics of airline prices and inventory levels as the flight date approaches. Such detailed information about inventories at a ticket level to analyze airline pricing has been used previously by the author to show the importance of capacity constraints in airline pricing. This dissertation proposes and implements many new ideas to analyze airline pricing. Among the most important are: (1) It uses information about inventories at a ticket level. (2) It is the first to note that fare changes can be explained by adding dummy variables representing ticket characteristics. Therefore, the load factor at a ticket level will lose its explanatory power on fares if all ticket characteristics are included in a pricing equation. (3) It is the first to propose and implement a measure of Expected Load Factor as a tool to identify which flights are peak and which ones are not. (4) It introduces a novel idea of comparing actual sales with average sales at various points prior departure. Using these deviations of actual sales from sales under average conditions, it presents is the first study to show empirical evidence of peak load pricing in airlines. (5) It controls for potential endogeneity of sales using dynamic panels. The first essay tests the empirical importance of theories that explain price dispersion under costly capacity and demand uncertainty. The essay calculates a measure of an Expected Load Factor, that is used to calibrate the distribution of demand uncertainty and to identify which flights are peak and which ones are off-peak. It shows that different prices can be explained by the different selling probabilities. The second essay is the first study to provide formal evidence of stochastic peak-load pricing in airlines. It shows that airlines learn about the demand and respond to early sales setting higher prices when expected demand is high and more likely to exceed capacity. Advisors/Committee Members: Gan, Li (advisor), Hwang, Hae-Shin (committee member), Puller, Steven (committee member), Wu, Ximing (committee member).

Subjects/Keywords: peak load pricing; airlines; price discrimination; demand uncertainty; costly capacity; demand learning

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APA (6^th Edition):

Escobari Urday, D. A. (2008). Essays on pricing under uncertainty. (Doctoral Dissertation). Texas A&M University. Retrieved from http://hdl.handle.net/1969.1/85918

Chicago Manual of Style (16^th Edition):

Escobari Urday, Diego Alfonso. “Essays on pricing under uncertainty.” 2008. Doctoral Dissertation, Texas A&M University. Accessed January 22, 2021. http://hdl.handle.net/1969.1/85918.

MLA Handbook (7^th Edition):

Escobari Urday, Diego Alfonso. “Essays on pricing under uncertainty.” 2008. Web. 22 Jan 2021.

Vancouver:

Escobari Urday DA. Essays on pricing under uncertainty. [Internet] [Doctoral dissertation]. Texas A&M University; 2008. [cited 2021 Jan 22]. Available from: http://hdl.handle.net/1969.1/85918.

Council of Science Editors:

Escobari Urday DA. Essays on pricing under uncertainty. [Doctoral Dissertation]. Texas A&M University; 2008. Available from: http://hdl.handle.net/1969.1/85918

Texas A&M University

7. Lee, Sungbok. Essays on the Relationship of Competition and Firms' Price Responses.

Degree: PhD, Economics, 2012, Texas A&M University

URL: http://hdl.handle.net/1969.1/ETD-TAMU-2010-12-8816

► This dissertation investigates the relationship of competition and firms' price responses, by analyzing: i) whether new entry reduces price discrimination, ii) when incumbents reduce price… (more)

▼ This dissertation investigates the relationship of competition and firms' price responses, by analyzing: i) whether new entry reduces price discrimination, ii) when incumbents reduce price discrimination preemptively in response to the threat of entry, and iii) how competition increases prices. The dissertation consists of three independent essays addressing each of the above questions. The first two essays present an empirical analysis of the airline industry and the third essay presents a theoretical analysis of the credit card industry. In the empirical study of the relationship between competition and firms' pricing in the airline industry, I emphasize the importance of distinguishing the equilibrium behaviors with respect to different market characteristics. Major airlines can price discriminate differently in a market where they compete with low-cost carriers comparing to in another market where they don't, and also they can respond dfferently to the threat of entry depending on whether they are certain about the rival's future entry. The study reveals that competition has a positive effect on price discrimination in the routes where major airlines compete against one anther. In these routes, competition reduces lower-end prices to a greater extent than upper-end prices. In contrast, an entry by low-cost carriers results in a significant negative relationship between competition and price discrimination. Thus, the opposite results in the literature are both evident in the airline industry, and it is very important to identify the different forces of competition on price discrimination. Firms can respond to potential competition as well as actual competition. So, I extend the study to the relationship of potential competition and price discrimination, specially in cases where major airlines compete against one another while facing Southwest's threat of entry. I also attempt to suggest major airlines' motives of reducing price discrimination preemptively. The results of the study suggest that incumbents reduce price dispersion when it is possible to deter the rival's entry and that the potential rival discourages incumbents from deterring entry by announcing before its beginning service. Finally, I examine when competition can increase prices in a market, by analyzing the issuing side of the credit card industry. This industry is characterized by a two-sided market with a platform. Under the no-surcharge rule that restricts merchants to set the same price for cash and card purchases, the equilibrium interchange fee increases with competition. This occurs because issuers can compensate losses from competing on the issuing side by collectively increasing the interchange fee. As a result, limiting competition may improve social welfare when the interchange fee is higher than the social optimal level. In contrast, in the absence of the no-surcharge rule, the analysis shows that competition always improves social welfare by lowering the price of the market. Advisors/Committee Members: Li, Qi (advisor), Houghton, Stephanie (committee member), Krasteva, Silvana (committee member), Bessler, David A. (committee member).

Subjects/Keywords: Competition; Price Dispersion; Discrimination; Oligopoly; Competitive-type Price Discrimination; Airline; Major airlines; Low-cost carriers; Threat of Entry; Incumbent; Preemptive; Entry; Accommodation; Deterrence; Pre-announcement; Contestability; Two-sided market; Network Externalities; Credit card; Interchange fee; No-surcharge rule; Platform; Issuer

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APA · Chicago · MLA · Vancouver · CSE | Export to Zotero / EndNote / Reference Manager

APA (6^th Edition):

Lee, S. (2012). Essays on the Relationship of Competition and Firms' Price Responses. (Doctoral Dissertation). Texas A&M University. Retrieved from http://hdl.handle.net/1969.1/ETD-TAMU-2010-12-8816

Chicago Manual of Style (16^th Edition):

Lee, Sungbok. “Essays on the Relationship of Competition and Firms' Price Responses.” 2012. Doctoral Dissertation, Texas A&M University. Accessed January 22, 2021. http://hdl.handle.net/1969.1/ETD-TAMU-2010-12-8816.

MLA Handbook (7^th Edition):

Lee, Sungbok. “Essays on the Relationship of Competition and Firms' Price Responses.” 2012. Web. 22 Jan 2021.

Vancouver:

Lee S. Essays on the Relationship of Competition and Firms' Price Responses. [Internet] [Doctoral dissertation]. Texas A&M University; 2012. [cited 2021 Jan 22]. Available from: http://hdl.handle.net/1969.1/ETD-TAMU-2010-12-8816.

Council of Science Editors:

Lee S. Essays on the Relationship of Competition and Firms' Price Responses. [Doctoral Dissertation]. Texas A&M University; 2012. Available from: http://hdl.handle.net/1969.1/ETD-TAMU-2010-12-8816

8. Carbonneau, Shane Edward. Three essays on competition and market power in airlines' hub-and-spoke networks.

Degree: PhD, Economics, 2005, University of Texas – Austin

URL: http://hdl.handle.net/2152/20993

► In this dissertation, I investigate hub carriers' competitive advantage in directional markets within their hub and spoke networks. In the first chapter, I examine whether… (more)

▼ In this dissertation, I investigate hub carriers' competitive advantage in directional markets within their hub and spoke networks. In the first chapter, I examine whether the competitive advantage of hub carriers in attracting hub-to-spoke passengers relative to spoke-to-hub passengers affects rivals' entry decisions in a symmetric way. The hub carrier advantage in attracting passengers at its concentrated hub airport creates an environment in which variation in the composition of demand in hub-to-spoke markets affects entry in a profoundly different way than demand variation in spoke-to-hub markets. In the second chapter, I examine hub carrier fares and price-cost margins in hub and spoke airport pairs. Exploiting variation across airport-pairs, I find that an increase in the proportion of business travelers in hub-to-spoke markets increases fares in these markets, while an increase in the proportion of business travelers in spoke-to-hub markets decreases fares. This result is consistent with the structural asymmetries found in the first chapter. However, the source of these concentration advantages remains ambiguous. These advantages could be due to cost benefits, demand effects, or market power. Exploiting the variation between hub-to-spoke and spoke-to-hub markets within airport pairs isolates the market power effect on fares. I find that difference in hub carrier airport shares explains most of the variation in its hub-to-spoke and spoke-to-hub price-cost margins. Unobserved quality and cost heterogeneity do not bias the result. In the final chapter we look at the relationship between market power and price discrimination. In the presence of price discrimination, at least one price does not equal marginal cost. Therefore, if price discrimination exists, there must be market power. While this logic is sound, it has led many policymakers to believe that price discrimination and market power are positively correlated. We present a model where measured price-discrimination can be low while market power is high and price discrimination can be high while market power is low, thus demonstrating that there is no theoretical connection between the strength of price discrimination and that of market power. We then present new evidence that price discrimination is negatively correlated with market power in the US airlines industry. Advisors/Committee Members: Hendricks, Kenneth (advisor).

Subjects/Keywords: Airlines; Competition; Market power; Hubs; Price discrimination; Hub-and-spoke networks

…2.5 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Chapter 3. Price… …77 78 80 82 x . . . . List of Figures 3.1 3.2 3.3 Price Discrimination Remains the… …Convex Combination of Technologies . . . . . . . . . . . . . . Power Remains High as Price… …Airports Carrier Hub City American Airlines MIA Miami, FL American Airlines DFW Dallas-Ft. Worth… …Continental Airlines EWR Newark Continental Airlines CLE Cleveland Continental Airlines IAH Houston…

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APA (6^th Edition):

Carbonneau, S. E. (2005). Three essays on competition and market power in airlines' hub-and-spoke networks. (Doctoral Dissertation). University of Texas – Austin. Retrieved from http://hdl.handle.net/2152/20993

Chicago Manual of Style (16^th Edition):

Carbonneau, Shane Edward. “Three essays on competition and market power in airlines' hub-and-spoke networks.” 2005. Doctoral Dissertation, University of Texas – Austin. Accessed January 22, 2021. http://hdl.handle.net/2152/20993.

MLA Handbook (7^th Edition):

Carbonneau, Shane Edward. “Three essays on competition and market power in airlines' hub-and-spoke networks.” 2005. Web. 22 Jan 2021.

Vancouver:

Carbonneau SE. Three essays on competition and market power in airlines' hub-and-spoke networks. [Internet] [Doctoral dissertation]. University of Texas – Austin; 2005. [cited 2021 Jan 22]. Available from: http://hdl.handle.net/2152/20993.

Council of Science Editors:

Carbonneau SE. Three essays on competition and market power in airlines' hub-and-spoke networks. [Doctoral Dissertation]. University of Texas – Austin; 2005. Available from: http://hdl.handle.net/2152/20993

Open Access Theses and Dissertations