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Identifying airline price discrimination and the effect of competition

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  • Lewis, Matthew S.

Abstract

Empirical studies exploring the relationship between competition and price discrimination don’t generally consider the role of product differentiation or the asymmetric adoption of discrimination across firms. Using a customized empirical approach to examine the use of Saturday-night stayover discounts in the U.S. airline industry, I show that discounts are used more often when facing competitors that offer differentiated products but less often when competing with firms that don’t use discounts. Legacy carriers rarely use discounts when competing with Southwest or other low-cost carriers, but the presence of competing legacy carriers sometimes enhances the use of discounts.

Suggested Citation

  • Lewis, Matthew S., 2021. "Identifying airline price discrimination and the effect of competition," International Journal of Industrial Organization, Elsevier, vol. 78(C).
    • Handle: RePEc:eee:indorg:v:78:y:2021:i:c:s0167718721000540
    DOI: 10.1016/j.ijindorg.2021.102761
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    References listed on IDEAS

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    Cited by:

    1. Ignatenko, Anna, 2024. "Competition and Price Discrimination in International Transportation," Discussion Paper Series in Economics 6/2024, Norwegian School of Economics, Department of Economics.
    2. Clavorà Braulin, Francesco, 2023. "The effects of personal information on competition: Consumer privacy and partial price discrimination," International Journal of Industrial Organization, Elsevier, vol. 87(C).
    3. Brad Shrago, 2024. "The Spirit Effect: Ultra-Low Cost Carriers and Fare Dispersion in the U.S. Airline Industry," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 64(4), pages 549-579, June.

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