Location of Repository

Airline Schedule Competition: Product-Quality Choice in a Duopoly Model

By Jan K. Brueckner and Ricardo Flores-Fillol

Abstract

This paper presents a simple model of airline schedule competition that circumvents the complexities of the spatial approach used in earlier papers. Consumers choose between two duopoly carriers, each of which has evenly spaced flights, by comparing the combinations of fare and expected schedule delay that they offer. In contrast to the spatial approach, the particular departure times of individual flights are thus not relevant. The model generates a number of useful comparative-static predictions, while welfare analysis shows that equilibrium flight frequencies tend to be inefficiently low.

OAI identifier:

Suggested articles

Preview

Citations

  1. (1995). 1Estimates by Morrison and Winston
  2. (2001). 2Using a spatial approach, Brueckner and Zhang
  3. (1992). A comment on a model of vertical product differentiation,
  4. (2001). A model of scheduling in airline networks: How a huband-spoke system affects flight frequency, fares and welfare,
  5. (2003). Airline deregulation and external costs: A welfare analysis,
  6. (2006). Airport noise regulation, airline service quality, and social welfare, unpublished paper,
  7. (2006). analyze the sequential case. 16When µ = 0, the airlinesare pure monopolists, which means that sequential and simultaneous choices of p and f must give the same solutions.
  8. (1992). and Wauthy
  9. (2006). Code-sharing agreements, frequency of flights, and profits under parallel operation, In:
  10. (1996). Compatibility and competition in airlines: Demand side network effects,
  11. (2006). Deregulation and welfare in airline markets: An analysis of frequency equilibria,
  12. (1979). Monopolistic competition with outside goods,
  13. (2004). Network structure and airline scheduling,
  14. (1979). On Hotelling’s stability in competition,
  15. (1979). Price competition, quality, and income distribution,
  16. (1996). Quality choice in models of vertical differentiation,
  17. (1982). Relaxing price competition through product differentiation,
  18. (1998). Schedule competition, fare competition and predation in a duopoly airline market, unpublished paper,
  19. (1995). The Evolution of the Airline Industry,
  20. (2000). The price effects of international airline alliances,
  21. (1988). The Theory of Industrial Organization,

To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.