Measuring Conduct and Cost Parameters in the Spanish Airline Market

Xavier Fageda

Review of Industrial Organization, 2006, vol. 28, issue 4, 379-399

Abstract: This paper examines airline competition through an empirical specification of a demand and pricing equation system. The system is estimated for the Spanish airline market using a simultaneous procedure. The suitability of the Cournot assumption is tested in a competitive scenario characterized by an asymmetric oligopoly with capacity constraints. In addition, the degree of density economies is analyzed. Results show that Spanish airlines behave in a less competitive way than is implied by the Cournot solution. Finally, some evidence on the fact that thin routes can be considered as natural monopolies is found. Copyright Springer 2006

Keywords: oligopoly; air transportation; multiple equation models; D43; L13; L93; C30 (search for similar items in EconPapers)
Date: 2006
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Citations: View citations in EconPapers (30)

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DOI: 10.1007/s11151-006-9104-x

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