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IS THE EFFECT OF COMPETITION ON PRICE DISPERSION NONMONOTONIC? EVIDENCE FROM THE US AIRLINE INDUSTRY
Journal article   Peer reviewed

IS THE EFFECT OF COMPETITION ON PRICE DISPERSION NONMONOTONIC? EVIDENCE FROM THE US AIRLINE INDUSTRY

Mian Dai, Qihong Liu and Konstantinos Serfes
The review of economics and statistics, v 96(1)
01 Mar 2014

Abstract

Business & Economics Economics Mathematical Methods In Social Sciences Social Sciences Social Sciences, Mathematical Methods
We investigate the effect of competition on price dispersion in the airline industry. Using panel data from 1993 to 2008, we find a nonmonotonic effect of competition on price dispersion. An increase in competition is associated with greater price dispersion in concentrated markets but with less price dispersion in competitive markets-an inverse-U relationship. Our empirical findings are consistent with an oligopolistic second-degree price discrimination model and encompass contradictory findings in the literature.

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Collaboration types
Domestic collaboration
Web of Science research areas
Economics
Social Sciences, Mathematical Methods
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