Arbeitspapier

Common ownership does not have anti-competitive effects in the airline industry

Institutional investors often own significant equity in firms that compete in the same product market. These "common owners" may have an incentive to coordinate the actions of firms that would otherwise be competing rivals, leading to anti-competitive pricing. This paper uses data on airline ticket prices to test whether common owners induce anti-competitive pricing behavior. We find little evidence to support such a hypothesis, and show that the positive relationship between average ticket prices and a commonly used measure of common ownership previously documented in the literature is generated by the endogenous market share component, rather than the ownership component, of the measure.

Language
Englisch

Bibliographic citation
Series: Working Paper ; No. 2019-15

Classification
Wirtschaft
Bankruptcy; Liquidation
Mergers; Acquisitions; Restructuring; Voting; Proxy Contests; Corporate Governance
Corporate Finance and Governance: Government Policy and Regulation
Monopolization; Horizontal Anticompetitive Practices
Production, Pricing, and Market Structure; Size Distribution of Firms
Subject
common ownership
airline prices
institutional ownership
competition

Event
Geistige Schöpfung
(who)
Dennis, Patrick
Gerardi, Kristopher
Schenone, Carola
Event
Veröffentlichung
(who)
Federal Reserve Bank of Atlanta
(where)
Atlanta, GA
(when)
2019

DOI
doi:10.29338/wp2019-15
Handle
Last update
10.03.2025, 11:42 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Dennis, Patrick
  • Gerardi, Kristopher
  • Schenone, Carola
  • Federal Reserve Bank of Atlanta

Time of origin

  • 2019

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