Airline alliances, carve-outs and collusion

Arbeitspapier

In this paper, we ask how antitrust immunity subject to a carve-out affects collusion incentives in international airline alliances. We show that the gains from economies of density due to higher interline traffic under the alliance strengthen the incentive to collude on the interhub segment, while the accompanying revenue gain heightens the incentive to defect from collusive behavior. These two effects exactly cancel in the case of linear demands and linear economies of density. Under this approximation, the incentives for interhub collusion are no different before and after the emergence of an airline alliance subject to a carve-out.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 3593

Classification and Topics

• Classification: Wirtschaft ; Industrial Organization: General
• Subject: collusion ; carve-out

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Brueckner, Jan K. ; Picard, Pierre M.
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2011

Further information

• Handle: http://hdl.handle.net/10419/52426
• Last update: 10.03.2025, 11:42 AM CET