Airline market power and intertemporal price dispersion

Alberto A. Gaggero, Claudio A. Piga

Research output: Contribution to journalArticle

41 Citations (Scopus)

Abstract

This paper analyzes the empirical relationship between market structure and price dispersion in the airline markets connecting the U.K. and the Republic of Ireland. Price dispersion is measured by the Gini coefficient, calculated using fares posted on the Internet at specific days before takeoff. We control for passengers' heterogeneity in their purpose of travel, as well as for such peak periods as Christmas and Easter. Our finding of a negative correlation between competition and price dispersion suggests that competition is likely to hinder the airlines' ability to price discriminate, although this effect appears to be lessened in peak periods.

Original languageEnglish
Pages (from-to)552-577
Number of pages26
JournalJournal of Industrial Economics
Volume59
Issue number4
DOIs
Publication statusPublished - 1 Dec 2011
Externally publishedYes

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Price dispersion
Market power
Airline market
Market structure
Republic of Ireland
Gini coefficient
Market price
Airlines
Christmas
World Wide Web

Cite this

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Airline market power and intertemporal price dispersion. / Gaggero, Alberto A.; Piga, Claudio A.

In: Journal of Industrial Economics, Vol. 59, No. 4, 01.12.2011, p. 552-577.

Research output: Contribution to journalArticle

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