An effect of consumer's earlier decision to purchase a discount ticket

Ryosuke Ishii and Kuninori Nakagawa

ビジネス創造センターディスカッション・ペーパー (Discussion papers of the Center for Business Creation) from Otaru University of Commerce

Abstract: In this article, we consider how effect consumer's earlier decision to purchase a discount ticket will have on the competition, price and timetable, between airlines. We focus on a relationship between consumer's purchasing behavior and a competition between airlines. We consider that a consumer can purchase a ticket two times, i.e. ex-ante and ex-post, corresponding to this timing, airlines also can set their prices of tickets. The main conclusion highlighted by this article is that, in a subgame perfect equilibrium, each airline's expected profit is unique and timetable is socially optimal regardless to a consumer's purchasing behavior.

Pages: 8 pages
Date: 2011-02-14
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Published in Discussion paper series (2011), 131: 1-8

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Persistent link: https://EconPapers.repec.org/RePEc:ota:busdis:10252/4502

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