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Endogenous and selective service choices after airline mergers

Author: Sophia Ying LiJoe MazurYongjoon ParkJames W RobertsAndrew SweetingAll authors
Publisher: Cambridge, Mass. : National Bureau of Economic Research, 2018.
Series: Working paper series (National Bureau of Economic Research), no. 24214.
Edition/Format:   eBook : Document : EnglishView all editions and formats
Summary:
We estimate a model of service choice and price competition in airline markets, allowing for the carriers that provide nonstop service to be a selected subset of the carriers competing in the market. Our model can be estimated without an excessive computational burden and we use the estimated model to illustrate the effects of selection on equilibrium market structure and to show how accounting for selection can  Read more...
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Details

Material Type: Document, Internet resource
Document Type: Internet Resource, Computer File
All Authors / Contributors: Sophia Ying Li; Joe Mazur; Yongjoon Park; James W Roberts; Andrew Sweeting; Jun Zhang; National Bureau of Economic Research,
OCLC Number: 1021285235
Notes: "January 2018"
Includes online appendices (28 pages).
Description: 1 online resource (50 pages) : illustrations, maps.
Series Title: Working paper series (National Bureau of Economic Research), no. 24214.
Responsibility: Sophia Ying Li, Joe Mazur, Yongjoon Park, James W. Roberts, Andrew Sweeting, Jun Zhang.

Abstract:

We estimate a model of service choice and price competition in airline markets, allowing for the carriers that provide nonstop service to be a selected subset of the carriers competing in the market. Our model can be estimated without an excessive computational burden and we use the estimated model to illustrate the effects of selection on equilibrium market structure and to show how accounting for selection can change predictions about post-merger market power and repositioning, in ways that are consistent with what has been observed after actual mergers, and possible merger remedies.

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