Price Discrimination in International Airline Markets
| Autor: | Gaurab Aryal, Charles Murry, Jonathan W. Williams |
|---|---|
| Rok vydání: | 2023 |
| Předmět: |
History
Economics and Econometrics General Economics (econ.GN) Polymers and Plastics media_common.quotation_subject Total efficiency Price discrimination Industrial and Manufacturing Engineering Microeconomics FOS: Economics and business Business Business and International Management Monopoly Inefficiency Welfare Private information retrieval Total surplus media_common Economics - General Economics |
| Zdroj: | Review of Economic Studies. |
| ISSN: | 1467-937X 0034-6527 |
| Popis: | We develop a model of inter-temporal and intra-temporal price discrimination by monopoly airlines to study the ability of different discriminatory pricing mechanisms to increase efficiency and the associated distributional implications. To estimate the model, we use unique data from international airline markets with flight-level variation in prices across time, cabins, and markets and information on passengers’ reasons for travel and time of purchase. The current pricing practice yields approximately 77% of the first-best welfare. The source of this inefficiency arises primarily from private information about passenger valuations, not dynamic uncertainty about demand. We also find that if airlines could discriminate between business and leisure passengers, total welfare would improve at the expense of business passenger surplus. Also, replacing the current pricing that involves screening passengers across cabin classes with offering a single cabin class has minimal effect on total welfare. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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