Discriminatory Product Differentiation: The Case of Israel's Omission from Airline Route Maps
49 Pages Posted: 11 Feb 2017 Last revised: 16 May 2019
Date Written: May 14, 2019
We ask whether international firms compete by designing products attractive to customers because they are objectionable to others. We investigate “discriminatory product differentiation” among international airlines through depictions of Israel on online route maps and availability of kosher meal options on online inflight menus. Analyses of data for 112 airlines indicate that Israel’s map omission and omission of kosher meal options increase for airlines with customers from countries exhibiting higher rates of anti-Semitism and airlines with state owners not recognizing Israel. Neither omission matters for membership in major alliances. Such discrimination may be objectionable, but its subtlety permits industry globalization.
Keywords: customer discrimination, product differentiation, airlines, alliances
JEL Classification: J15, L88, L93, M16, D74
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