Entry games for the airline industry

Christian Bontemps and Raquel Menezes Bezerra Sampaio
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Raquel Menezes Bezerra Sampaio: UFRN - Universidade Federal do Rio Grande do Norte [Natal]

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Abstract: In this paper we review the literature on static entry games and show how they can be used to estimate the market structure of the airline industry. The econometrics challenges are presented, in particular the problem of multiple equilibria and some solutions used in the literature are exposed. We also show how these models, either in the complete information setting or in the incomplete information one, can be estimated from i.i.d. data on market presence and market characteristics. We illustrate it by estimating a static entry game with heterogeneous firms by Simulated Maximum Likelihood on European data for the year 2015.

Keywords: Industrial organization; Entry; Multiple equilibria; Airlines; Estimation (search for similar items in EconPapers)
Date: 2020-12
New Economics Papers: this item is included in nep-ban, nep-com, nep-ecm, nep-gth and nep-reg
Note: View the original document on HAL open archive server: https://hal.science/hal-02137358v2
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Published in Air Transport and Regional Development Methodologies, 2020, 9780429021855. ⟨10.4324/9780429021855⟩

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Working Paper: Entry games for the airline industry (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02137358

DOI: 10.4324/9780429021855

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