The Determinants of Concession Bargaining in the Airline Industry

Leslie A. Nay

ILR Review, 1991, vol. 44, issue 2, 307-323

Abstract: The author uses airline industry data to evaluate the role of economic, institutional, and strategic choice factors as determinants of seven types of concession bargaining outcomes. The results indicate that economic characteristics, particularly “ability to pay†measures, are the best predictors of most concessions. Institutional characteristics, such as the percentage of union members employed in the airline industry, are apparently less important, but their addition to the economic and strategic choice variables does improve the model's predictive power. Least influential, the author finds, are the strategic choice variables, such as a decision to compete on the basis of low-cost service. She notes, however, that it is difficult to identify effects of strategic choices independent from the effects of more traditional economic variables.

Date: 1991
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