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An effect of consumer\u27s earlier decision to purchase a discount ticket

Abstract

In this article, we consider how effect consumer\u27s earlier decision to purchase a discount ticket will have on the competition, price and timetable, between airlines. We focus on a relationship between consumer\u27s purchasing behavior and a competition between airlines. We consider that a consumer can purchase a ticket two times, i.e. ex-ante and ex-post, corresponding to this timing, airlines also can set their prices of tickets. The main conclusion highlighted by this article is that, in a subgame perfect equilibrium, each airline\u27s expected profit is unique and timetable is socially optimal regardless to a consumer\u27s purchasing behavior

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