Arbeitspapier

Measuring strategic firm interaction in product-quality choices: The case of airline flight frequency

This paper investigates strategic interaction among airlines in product-quality choices. Using an instrumental variables approach, the paper estimates flight-frequency reaction functions, which relate an airline's frequency on a route to its own characteristics and to the frequencies of competing airlines. A positive reaction function slope is found in some cases, indicating the presence of strategic interaction in the choice of frequencies. The paper also asks whether multimarket contact generates mutual forbearance in frequency competition, finding no evidence for such an effect.

Language
Englisch

Bibliographic citation
Series: CESifo Working Paper ; No. 4066

Classification
Wirtschaft
Market Structure, Firm Strategy, and Market Performance: General
Air Transportation
Subject
airlines
reaction function
product quality
flight frequency
Luftverkehrsgesellschaft
Dienstleistungsqualität
Wettbewerb
Reaktionsfunktion
Theorie
Schätzung
USA

Event
Geistige Schöpfung
(who)
Brueckner, Jan K.
Luo, Dan
Event
Veröffentlichung
(who)
Center for Economic Studies and ifo Institute (CESifo)
(where)
Munich
(when)
2013

Handle
Last update
10.03.2025, 11:42 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Brueckner, Jan K.
  • Luo, Dan
  • Center for Economic Studies and ifo Institute (CESifo)

Time of origin

  • 2013

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