EconPapers    
Economics at your fingertips  
 

Mergers and Product Quality: Evidence from the Airline Industry

Yongmin Chen () and Philip Gayle ()

MPRA Paper from University Library of Munich, Germany

Abstract: Retrospective studies of horizontal mergers have focused on their price effects, leaving the important question of how mergers affect product quality largely unanswered. This paper empirically investigates this issue for two recent airline mergers: Delta/Northwest and Continental/United. Consistent with the theoretical premise that mergers improve coordination but diminish competitive pressure for quality provision, we find: (i) each merger is associated with a quality increase in markets where the merging firms did not compete pre-merger, but with a quality decrease in markets where they did; and (ii) the quality change can be a U-shaped function of the pre-merger competition intensity.

Keywords: Mergers; Product Quality; Airlines (search for similar items in EconPapers)
JEL-codes: L13 L93 (search for similar items in EconPapers)
Date: 2013-11-04
New Economics Papers: this item is included in nep-bec, nep-com, nep-ind, nep-tid and nep-tre
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8) Track citations by RSS feed

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/51238/1/MPRA_paper_51238.pdf original version (application/pdf)

Related works:
Journal Article: Mergers and product quality: Evidence from the airline industry (2019) Downloads
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: https://EconPapers.repec.org/RePEc:pra:mprapa:51238

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().

 
Page updated 2021-01-12
Handle: RePEc:pra:mprapa:51238