Price Dispersion, Competition, and Efficiency: Evidence from Chicago-Based Routes

Levent Kutlu and Ran Wang

Journal of Transport Economics and Policy, 2018, vol. 52, issue 1, 23--44

Abstract: Abstract In this study, we analyse the determinants of airline price dispersion. We particularly concentrate on the relationship between the conduct (a proxy for market power) and marginal cost efficiency. The effect of conduct on price dispersion seems to depend on the characteristics of the market. For the big city routes, conduct has a positive effect on price dispersion, and for the leisure routes, the effect is negative. Also, we find that marginal cost efficiency has a negative effect on price dispersion.

Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:tpe:jtecpo:2018:52:1:23--44

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