Dynamic oligopoly pricing: Evidence from the airline industry

Caspar Siegert and Robert Ulbricht

International Journal of Industrial Organization, 2020, vol. 71, issue C

Abstract: We explore how pricing dynamics in the European airline industry vary with the competitive environment and with customer heterogeneity. We document three main findings. First, the rate at which prices increase towards the scheduled departure date is significantly reduced in more competitive markets. Second, the sensitivity of the intertemporal slope to competition increases in the heterogeneity of the customer base. Third, ex-ante predictable advance purchase discounts account for 83 percent of within-flight dispersion in prices and for 17 percent of cross-market variation in pricing dynamics.

Keywords: Airline industry; Dynamic oligopoly pricing; Intertemporal price dispersion; Price discrimination (search for similar items in EconPapers)
JEL-codes: D43 D92 L11 L93 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (14)

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Related works:
Working Paper: Dynamic Oligopoly Pricing: Evidence from the Airline Industry (2019)
Working Paper: Dynamic Oligopoly Pricing: Evidence from the Airline Industry (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:indorg:v:71:y:2020:i:c:s016771872030062x

DOI: 10.1016/j.ijindorg.2020.102639

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