Does Competition Reduce Price Dispersion? New Evidence from the Airline Industry
Datos Bibliográficos
| ID | 10174336 |
|---|---|
| Autores | Kristopher Gerardi (0000-0002-7775-4105, Federal Reserve Bank of Atlanta), Kristopher S Gerardi, Adam Hale Shapiro (0000-0002-3431-2817, Bureau of Economic Analysis) |
| Idioma | EN |
| Citas recibidas | 11 |
| Referencias citadas | 14 |
We analyze the effects of competition on price dispersion in the airline industry, using panel data from 1993:Q1 through 2006:Q3. Competition has a negative effect on price dispersion, in line with the textbook treatment of price discrimination. This effect is pronounced for routes with consumers characterized by relatively heterogeneous elasticities of demand. On routes with a homogeneous customer base, the effects of competition on price dispersion are smaller. Our results contrast with those of Borenstein and Rose, who found that price dispersion increases with competition. We reconcile the different results by showing that the cross-sectional estimator suffers from omitted-variable bias. (c) 2009 by The University of Chicago. All rights reserved
Competition (biology · Customer base · Dispersion (optics · Econometrics · Economics · Homogeneous · Microeconomics · Panel data · Price dispersion · Aviation Industry Analysis and Trends · Consumer Market Behavior and Pricing · Mathematics · Transport and Economic Policies
| Altamente citado | No |
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