Reputation, search cost, and airfares

Volodymyr Bilotkach

Journal of Air Transport Management, 2010, vol. 16, issue 5, 251-257

Abstract: As cost of search for consumers decreases with the spread of the internet; researchers question whether this trend will lead to lower price or higher product differentiation. This paper examines a sample of offered fares to see if an airline choosing not to distribute its tickets via a channel where competitors' offers are directly observable may attempt taking advantage of potential customers. We find this to be the case. Our study suggests that the US airline industry appears to be evolving toward more product differentiation in the internet age.

Keywords: Search cost; Offered fares; Travel agents; Southwest Airlines (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jaitra:v:16:y:2010:i:5:p:251-257

DOI: 10.1016/j.jairtraman.2010.01.002

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