Economics at your fingertips  

Price Discrimination in International Airline Markets

Gaurab Aryal (), Charles Murry () and Jonathan Williams ()
Additional contact information
Jonathan Williams: Department of Economics, University of North Carolina - Chapel Hill

No 968, Boston College Working Papers in Economics from Boston College Department of Economics

Abstract: We develop a model of inter-temporal and intra-temporal price discrimination by airlines to study the ability of different discriminatory mechanisms to remove sources of inefficiency and the associated distributional implications. To estimate the model’s multi-dimensional distribution of preference heterogeneity, we use unique data from international airline markets with flight-level variation in prices across time and cabins, and information on passengers’ reason for travel. We find that current pricing practices grant late-arriving business passengers substantial informational rents and yield 81% of first-best welfare, with stochastic demand and asymmetric information accounting for 65% and 35% of the gap, respectively.

Keywords: dynamic pricing; screening; perishable goods (search for similar items in EconPapers)
JEL-codes: L00 D42 L93 (search for similar items in EconPapers)
Date: 2018-11-26
New Economics Papers: this item is included in nep-com, nep-ind and nep-tre
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link) main text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Access Statistics for this paper

More papers in Boston College Working Papers in Economics from Boston College Department of Economics Boston College, 140 Commonwealth Avenue, Chestnut Hill MA 02467 USA. Contact information at EDIRC.
Bibliographic data for series maintained by Christopher F Baum ().

Page updated 2020-09-13
Handle: RePEc:boc:bocoec:968