Incertitude stratégique et taille de marché: le cas de l’amendement Wright

Philippe Gagnepain and Stephane Gauthier

Revue économique, 2022, vol. 73, issue 5, 761-779

Abstract: This paper exploits the repeal of the Wright amendment as a natural experiment in order to contribute to the ongoing discussion on how the enlargement of the relevant market affects the ability of firms to coordinate on a Nash equilibrium. Using data on the US air transportation industry, we present a difference-in-difference procedure which sheds light on the significant loss of accuracy in airlines? predictions in markets originating in Dallas after the Love Field airport started operating long distance services in 2014. This suggests that competition authorities should be careful when they refer to the Nash equilibrium following market expansion reforms.

Keywords: market definition; Nash equilibrium; airline industry; transportation (search for similar items in EconPapers)
Date: 2022
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Working Paper: Incertitude stratégique et taille de marché: le cas de l’amendement Wright (2022)
Working Paper: Incertitude stratégique et taille de marché: le cas de l’amendement Wright (2022)
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