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Are Airlines' Price Setting Strategies Different?

Volodymyr Bilotkach
University of California, Irvine - Department of Economics

Oleksandr Talavera
University of East Anglia

Yuriy Gorodnichenko
University of California, Berkeley - Department of Economics; National Bureau of Economic Research (NBER); Institute for the Study of Labor (IZA)

Igor Zubenko
Ostroh Academy National University


October 2006


Abstract:     
Using a sample of fare quotes for non-stop travel from New York to London, this paper investigates the dynamics of offered fares as the departure date nears. We find that the general trend is toward fare increase at an accelerated rate as the departure date approaches. Clear differences in price-setting strategies among the carriers competing on a particular route are documented.

Keywords: airline industry, price dynamics

JEL Classifications: L93, D21

Working Paper Series

Date posted: December 26, 2006 ; Last revised: December 26, 2006

Suggested Citation

Bilotkach, Volodymyr , Talavera, Oleksandr, Gorodnichenko, Yuriy and Zubenko, Igor, Are Airlines' Price Setting Strategies Different? (October 2006). Available at SSRN: http://ssrn.com/abstract=953507


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Contact Information

Volodymyr Bilotkach (Contact Author)
University of California, Irvine - Department of Economics ( email )
3151 Social Science Plaza
Irvine, CA 92697-5100
United States
949-824-5192 (Phone)
Yuriy Gorodnichenko
University of California, Berkeley - Department of Economics ( email )
549 Evans Hall #3880
Berkeley, CA 94720-3880
United States
HOME PAGE: http://www.econ.berkeley.edu/~ygorodni/index.htm
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Institute for the Study of Labor (IZA)
P.O. Box 7240
D-53072 Bonn Germany
Oleksandr Talavera
University of East Anglia ( email )
Norwich NR4 7TJ, Norfolk United Kingdom
Igor Zubenko
Ostroh Academy National University ( email )
Seminarska Str. 2
Ostroh 265620 Ukraine
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