Are Airlines' Price Setting Strategies Different?
12 Pages Posted: 26 Dec 2006
Date Written: October 2006
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 Classification: L93, D21
Suggested Citation: Suggested Citation