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Competitive Effects of Exchanges or Sales of Airport Landing Slots

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  • James Reitzes
  • Brendan McVeigh
  • Nicholas Powers
  • Samuel Moy

Abstract

We investigate the competitive effects of exchanges or sales of airport landing slots, using a model where airlines allocate their slot endowments across routes consistent with a Cournot–Nash equilibrium. With symmetric endowments, an increase in the number of slot-holding airlines raises social welfare and consumer surplus. Under asymmetric slot endowments, larger slot holders serve “thin” demand routes that are not served by smaller slot holders. Transfers of slots from larger to smaller slot holders increase social welfare and consumer surplus; however, fewer routes may be served. These results may be reversed if airlines face substantial route-level fixed costs. Copyright Springer Science+Business Media New York 2015

Suggested Citation

  • James Reitzes & Brendan McVeigh & Nicholas Powers & Samuel Moy, 2015. "Competitive Effects of Exchanges or Sales of Airport Landing Slots," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 46(2), pages 95-125, March.
    • Handle: RePEc:kap:revind:v:46:y:2015:i:2:p:95-125
    DOI: 10.1007/s11151-014-9438-8
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    References listed on IDEAS

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    Cited by:

    1. Valdes, Victor & Gillen, David, 2018. "The consumer welfare effects of slot concentration and reallocation: A study of Mexico City International Airport," Transportation Research Part A: Policy and Practice, Elsevier, vol. 114(PA), pages 256-269.
    2. Huubinh B. Le & Jules O. Yimga, 2023. "Slot Divestitures and Price Competition at Reagan National and LaGuardia," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 62(4), pages 321-340, June.
    3. Sunhyung Lee & Zexuan Liu & Haojun Yu, 2021. "Heterogeneous price effects and increased price dispersion from quantity‐based congestion management," Economic Inquiry, Western Economic Association International, vol. 59(3), pages 1378-1402, July.

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