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Author: | Armantier, O. Richard, O. |
Title: | Exchanges of cost information in the airline industry |
Journal: | RAND Journal of Economics
2003 : AUTUMN, VOL. 34:3, p. 461-477 |
Index terms: | Airlines Air transport Costs Information |
Language: | eng |
Abstract: | Exchanges of cost information are empirically analyzed in a multimarket oligopoly model for the airline industry with entry and incomplete information on marginal costs. An algorithm is developed to solve the Nash equilibrium numerically. The structural model of supply decisions is estimated using data on the American Airlines and United Airlines duopoly at Chicago O'Hare airport. The results provide probabilities of entry, expected quantities, prices and profits in each market. |
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