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Identifying airline price discrimination and the effect of competition

Matthew Lewis

International Journal of Industrial Organization, 2021, vol. 78, issue C

Abstract: Empirical studies exploring the relationship between competition and price discrimination don’t generally consider the role of product differentiation or the asymmetric adoption of discrimination across firms. Using a customized empirical approach to examine the use of Saturday-night stayover discounts in the U.S. airline industry, I show that discounts are used more often when facing competitors that offer differentiated products but less often when competing with firms that don’t use discounts. Legacy carriers rarely use discounts when competing with Southwest or other low-cost carriers, but the presence of competing legacy carriers sometimes enhances the use of discounts.

Keywords: Price discrimination; Competition; Airlines (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1016/j.ijindorg.2021.102761

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