Airline Pricing Behaviour under Limited Intermodal Competition

Angela Bergantino and Claudia Capozza

MPRA Paper from University Library of Munich, Germany

Abstract: This paper empirically analyses airline pricing for short-haul flights in contexts with no credible threat of inter-modal competition. To this end, we explore the southern Italian market since it is less accessible by other transport modes and thus fares are the direct outcome of air-related competition. We show, in fact, that market power matters, depending on the level of intra-modal competition, and that airlines apply differentiated mark-ups. Besides, consistent with the implementation of inter-temporal price discrimination (IPD), we find a non-monotonic inter-temporal profile of fares with a turning point included in the interval of the 43th to 45th days before departure. Finally, we provide evidence that in more competitive markets, airlines are more likely to engage in IPD.

Keywords: airfares; market structure; intertemporal price discrimination (search for similar items in EconPapers)
JEL-codes: L11 L13 L9 L93 (search for similar items in EconPapers)
Date: 2013-11-27, Revised 2013-11-27
New Economics Papers: this item is included in nep-com, nep-hme, nep-ind, nep-tre and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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https://mpra.ub.uni-muenchen.de/48892/1/MPRA_paper_48892.pdf original version (application/pdf)

Related works:
Journal Article: AIRLINE PRICING BEHAVIOR UNDER LIMITED INTER‐MODAL COMPETITION (2015)
Working Paper: Airline Pricing Behaviour Under Limited Intermodal Competition (2012)
Working Paper: Airline Pricing Behaviour Under Limited Intermodal Competition (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:48892

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