Multimarket Contactand Pricing: A Case of the U.S. Airline Industry

DOI

10.2991/ssemse-15.2015.578How to use a DOI?

Keywords

MMC; pricing; LCC; JetBlue

Abstract

Focusing on the case of JetBlue, our study of JetBlue’s main markets with 4122 sample observations empirically investigates the effects of multimarket contacts (MMC) on U.S. air carriers’ pricing behaviors of low-cost carriers (LCCs) and full-service carriers (FSCs) as well as those among LCCs. We estimate the simultaneous demand and price (pseudo-supply) equations to derive these impacts of MMC and find: (1) the effect of multimarket contacts is lowered when FSCs compete with LCCs; (2) LCCs’ airfares stay at low levels, even though they repeat multimarket contacts among LCCs. The analysis results reveal that the JetBlue’s behaviors have strong impacts on lowering airfares.

Copyright

© 2015, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - W.F. Guo
PY  - 2015/11
DA  - 2015/11
TI  - Multimarket Contactand Pricing: A Case of the U.S. Airline Industry
BT  - Proceedings of the 2015 International Conference on Social Science, Education Management and Sports Education
PB  - Atlantis Press
SP  - 2279
EP  - 2282
SN  - 2352-5398
UR  - https://doi.org/10.2991/ssemse-15.2015.578
DO  - 10.2991/ssemse-15.2015.578
ID  - Guo2015/11
ER  -