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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 SeriesDate posted: December 26, 2006 ; Last revised: December 26, 2006Suggested CitationContact Information
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