Bottleneck Co-Ownership as a Regulatory Alternative: Evidence from Airline Industry
29 Pages Posted: 12 Mar 2023
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: 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
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