A Competition Model for A Brazilian Air Shuttle Market

Alessandro Oliveira
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Alessandro Oliveira: University of Warwick

No 160, Royal Economic Society Annual Conference 2003 from Royal Economic Society

Abstract: This paper aims at developing a competition model for a relevant subset of the Brazilian airline industry: the air shuttle market on the route Rio de Janeiro Ð S*o Paulo, a pioneer service created in 1959. The competition model presented here contains elements of both vertical product differentiation and representative consumer. I also use the conduct parameter approach to infer about the behaviour of airlines in the market under three situations: a quasideregulation rocess (from 1998 on), two price war events (1998 and 2001), and a shock in costs due to currency devaluation (1999). Results permitted making inference on the impacts of liberalisation on competition and investigating an alleged collusive behaviour of 1999.

Keywords: air shuttle; competition; deregulation; product differentiation (search for similar items in EconPapers)
JEL-codes: L93 (search for similar items in EconPapers)
Date: 2003-06-04
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