search query: @author Berry, S. T. / total: 3
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| Author: | Berry, S. T. |
| Title: | Airport presence as product differentiation |
| Journal: | American Economic Review
1990 : MAY, VOL. 80:2, p. 394-399 |
| Index terms: | AIRPORTS AIR TRANSPORT PRODUCT DIFFERENTIATION COST REDUCTION OLIGOPOLY |
| Language: | eng |
| Abstract: | There is a widespread recognition that an airline's operation at a given airport affects greatly its competitive position on routes flown out of that airport. It is argued that both simple cost-reducing and naive market power stories are inappropriate for the airline industry. A model is presented in which consumers are willing to pay a premium for the services of the dominant airline, that include flight frequency, frequent flier miles, and travel agent commission overrides. This model has the advantage of treating oligopoly product differentiation in an explicit way, of treating price as an endogenous variable, and of allowing for airport presence to affect both costs and demand. |
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