Market power, cost efficiency and pricing strategies of domestic airline industry

Market power;Conduct parameter;Cost efficiency;Price dispersion;Load factor

Wang, Ran ; Kutlu, Levent Economics Ghosal, Vivek Kim, Byung-Cheol Nair-Reichert, Usha C. Thursby, Jerry ; Kutlu, Levent

University:Georgia Institute of Technology

Department:Economics

关键词: Market power;    Conduct parameter;    Cost efficiency;    Price dispersion;    Load factor;   

Others  :  https://smartech.gatech.edu/bitstream/1853/53930/1/WANG-DISSERTATION-2015.pdf

美国|英语

来源: SMARTech Repository

【 摘 要 】

This dissertation first develops a theoretical framework to enable the estimation of cost efficiency and conduct parameter without total cost data. By validating this framework using U.S. airline data, this dissertation shows the feasibility of the theoretical framework. Based on the estimates of marginal cost efficiency and conduct parameter, this dissertation also finds some support for the Quiet Life Hypothesis. In Chapter III, this dissertation analyzes the determinants for price dispersion, especially conduct parameter and cost efficiency. Generally speaking, we find negative relationship between conduct parameter and price dispersion and negative relationship between marginal cost efficiency and price dispersion. In Chapter IV, this thesis examines the dynamics that lead to high price dispersion. To be more specific, this thesis concentrates on advanced days purchased and load factor.