Economics, Econometrics and Finance
8 years ago

Multi-market competition in airlines drives price dispersion, impacting consumer wallets.

Developments in marketing science: proceedings of the Academy of Marketing Science
Price Dispersion in the Airline Industry: A Conceptual Framework and Empirical Analysis
Edward D. Gailey, Ashutosh Dixit, Thomas W. Whipple, Rajshekhar Raj G. Javalgi

Paper Summary

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Price dispersion in the airline industry can affect prices, profits, and overall welfare. The study looked at how competition and market structure impact price differences. They found that when rival airlines compete in multiple markets, prices vary more. Also, when there is both competition and market concentration, price differences increase. This research helps companies develop better marketing strategies.