Predatory reputation in US airline markets

Sung-Hwan Kim ()

International Journal of Industrial Organization, 2009, vol. 27, issue 5, pages 592-604

Abstract: Despite its long history in antitrust policy, predation remains a poorly understood phenomenon. The main difficulty is in empirically identifying predatory intent. I propose a method for measuring the effect of reputation, whose significance would enable us to infer predatory intents. Maximum likelihood estimation using simulated annealing algorithm is conducted with a sample of US airline markets. The results provide some support for the presence of entrants learning and reputation effect. As an application, I discuss how the outcomes of my empirical model could help analyze such antitrust cases as the American Airlines Case.

Keywords: Predatory; reputation; Discrete; choice; model; Entry; Learning; Airline; market (search for similar items in EconPapers)
Date: 2009

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Persistent link: http://EconPapers.repec.org/RePEc:eee:indorg:v:27:y:2009:i:5:p:592-604

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