IDEAS home Printed from https://ideas.repec.org/a/tpe/jtecpo/v45y2011i1p21-40.html
   My bibliography  Save this article

Many Fields of Battle How Cost Structure Affects Competition Across Multiple Markets

Author

Listed:
  • Li Zou
  • Martin Dresner
  • Robert Windle

Abstract

Traditional analysis of multi-point competition suggests that firms compete less intensely with one another when they have strategic contacts across multiple markets. However, this mutual forbearance argument has not incorporated production cost differences between firms as moderating factors. Based on the US domestic air travel data, we find that the collusion-facilitating effects (as measured by airfare increases) from multi-market contact hold when multi-market contact occurs among carriers with either uniformly low costs or uniformly high costs, although, in some cases, carrier pricing is also influenced by multi-market contact between airlines with different cost structures. © 2011 LSE and the University of Bath

Suggested Citation

  • Li Zou & Martin Dresner & Robert Windle, 2011. "Many Fields of Battle How Cost Structure Affects Competition Across Multiple Markets," Journal of Transport Economics and Policy, University of Bath, vol. 45(1), pages 21-40, January.
  • Handle: RePEc:tpe:jtecpo:v:45:y:2011:i:1:p:21-40
    as

    Download full text from publisher

    File URL: http://www.catchword.com/cgi-bin/cgi?ini=bc&body=linker&reqidx=0022-5258(20110101)45:1L.21;1-
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ma, Wenliang & Wang, Qiang & Yang, Hangjun & Zhang, Yahua, 2020. "Is multimarket contact an antitrust concern? A case of China’s airline market," Transportation Research Part A: Policy and Practice, Elsevier, vol. 132(C), pages 515-526.
    2. Ng, Kam To & Fu, Xiaowen & Lee, Jaewoon & Yamaguchi, Katsuhiro & Zhu, Chuanyan, 2023. "The Effects of Bankruptcy on Airline Yield and Frequency: The case of the duopolistic domestic market in Japan," Transport Policy, Elsevier, vol. 142(C), pages 28-36.
    3. Zou, Li & Yu, Chunyan & Dresner, Martin, 2012. "Multimarket contact, alliance membership, and prices in international airline markets," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 48(2), pages 555-565.
    4. Murakami, Hideki & Asahi, Ryota, 2011. "Multimarket Contact And Market Power: A Case Of The U.S. Airline Industry," Hitotsubashi Journal of commerce and management, Hitotsubashi University, vol. 45(1), pages 81-88, October.
    5. Brueckner, Jan K. & Luo, Dan, 2014. "Measuring strategic firm interaction in product-quality choices: The case of airline flight frequency," Economics of Transportation, Elsevier, vol. 3(1), pages 102-115.
    6. Hideki Murakami & Ryota Asahi, 2011. "An empirical analysis of the effect of multimarket contacts on air carriers' pricing behaviors: A case of the U.S," Discussion Papers 2011-35, Kobe University, Graduate School of Business Administration.
    7. Zou, Bo & Hansen, Mark, 2014. "Flight delay impact on airfare and flight frequency: A comprehensive assessment," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 69(C), pages 54-74.
    8. Netherlands Bureau for Economic Policy Analysis, 2015. "Study on the economic effects of the current VAT rules for passenger transport," Taxation Studies 0055, Directorate General Taxation and Customs Union, European Commission.
    9. Lijesen, Mark & Behrens, Christiaan, 2017. "The spatial scope of airline competition," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 99(C), pages 1-13.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tpe:jtecpo:v:45:y:2011:i:1:p:21-40. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Christopher F. Baum (email available below). General contact details of provider: http://www.bath.ac.uk/e-journals/jtep .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.