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Is the Effect of Competition on Price Dispersion Non-Monotonic? Evidence from the U.S. Airline Industry
SSRN Electronic Journal
2012
Abstract
We investigate the effect of competition on price dispersion in the airline industry. Using panel data from 1993 to 2008, we find a non-monotonic effect of competition on price dispersion. An increase in competition is associated with greater price dispersion in concentrated markets but is associated with less price dispersion in competitive markets (i.e. 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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Details
- Title
- Is the Effect of Competition on Price Dispersion Non-Monotonic? Evidence from the U.S. Airline Industry
- Creators
- Mian Dai - Drexel University
- Publication Details
- SSRN Electronic Journal
- Publisher
- SSRN
- Resource Type
- Other
- Language
- English
- Academic Unit
- Economics (School of Economics)
- Other Identifier
- 991020537629804721