Pricing of imperfect substitutes: The next flight is not the same flight

Julien E. van den Bogaard and Mark Lijesen ()

Research in Transportation Economics, 2019, vol. 78, issue C

Abstract: We investigate how airfares respond to changes in the fare of adjacent flights. Using a fixed effects regression on fares from Amsterdam to Geneva, we find flights that only differ in departure times to be weak substitutes. Fare-to-fare elasticities for imperfect substitute flights of different airlines are even smaller, implying weak competition between airlines on this specific route.

Keywords: Imperfect substitutes; Pricing; Airlines; Product differentiation (search for similar items in EconPapers)
JEL-codes: D43 L93 (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1016/j.retrec.2019.100741

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