Engineer

Airline price contends with multi-market carrier contacts and low-cost carrier entrants Gary M. Fournier* and doubting doubting Thomas Zuehlke March 2003 Paper prepared for the International Industrial nerve Conference, Boston, Massachusetts, April 5-6, 2003. Authors thank Bureau of Transportation Studies for supplying selective information for this study. * come home information: Department of Economics MC 2180, Florida State University, Tallahas regain, FL 32306-2180 gfournie@coss.fsu.edu. Ph: (850)-644-7080. Airline price wars with multi-market carrier contacts and low-cost carrier entrants Gary M. Fournier and Thomas Zuehlke Abstract Recent studies of airline price wars have raised interesting questions about the measurement of this phenomenon (Busse, 2002; Ross, 1997). We apply the rank control criterion for airlines in more than a thousand major route markets from 1996-1999 and find that the method appears to over-predict the frequency of fare wars. hop on in understanding causes and consequences depend on meaningful diagnosis of when and where fare wars are actually occurring (Morrison and Winston, 1996). Adopting higher thresholds for price war events, we proceed to explore the impact of multi-market contacts and other market bodily structure variables.

We adapt an index of assortativity, described by Newman (2002) in some other context, of carrier route systems in each route that measures the intent of common routes ties among all local carriers. The index proves highly remarkable in explaining the probability of fare war occurrences in the data and seems to outperform other multi-market indicies that have been suggested. 2 Section 1. Introduction worth wars in airlines have been extensively examined in the literature. For recent examples, see Busse, 2002 and Ross, 1997. The phenomenon was once thought to be so pervasive as to make competition unworkable for this industry, requiring an extensive system of regularization (For a critical view, Keeler, 1978). Later, opponents of... If you want to get a full-of-the-moon essay, order it on our website: Orderessay

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