Bottleneck Co-Ownership as a Regulatory Alternative: Evidence from Airline Industry

29 Pages Posted: 12 Mar 2023

See all articles by Caixia Shen

Caixia Shen

Shanghai University of Finance and Economics

Abstract

This paper empirically tests the bottleneck co-ownership theory presented in Boffa and Panzar (2012) by using data in the US airline industry. We present a structural model of codesharing between major airlines and regional airlines. The empirical evidence in this study supports the bottleneck coownership theory. The estimation results show that bottleneck co-ownership as a regulatory alternative gains higher welfare than average pricing in disintegrated vertical relation. Consumers benefit with lower product prices and firms have higher profits.

Keywords: regulatory airline codesharing

Suggested Citation

Shen, Caixia, Bottleneck Co-Ownership as a Regulatory Alternative: Evidence from Airline Industry. Available at SSRN: https://ssrn.com/abstract=4386162 or http://dx.doi.org/10.2139/ssrn.4386162

Caixia Shen (Contact Author)

Shanghai University of Finance and Economics ( email )

777 Guoding Road
Shanghai, AK Shanghai 200433
China

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