TY - JOUR
AU1 - Aryal, Gaurab
AU2 - Ciliberto, Federico
AU3 - Leyden, Benjamin T
AB - We investigate the allegation that legacy US airlines communicated via earnings calls to coordinate with other legacy airlines in offering fewer seats on competitive routes. To this end, we first use text analytics to build a novel dataset on communication among airlines about their capacity choices. Estimates from our preferred specification show that the number of offered seats is 2$\%$ lower when all legacy airlines in a market discuss the concept of “capacity discipline.” We verify that this reduction materializes only when legacy airlines communicate concurrently, and that it cannot be explained by other possibilities, including that airlines are simply announcing to investors their unilateral plans to reduce capacity, and then following through on those announcements.
TI - Coordinated Capacity Reductions and Public Communication in the Airline Industry
JF - The Review of Economic Studies
DO - 10.1093/restud/rdab100
DA - 2021-12-28
UR - https://www.deepdyve.com/lp/oxford-university-press/coordinated-capacity-reductions-and-public-communication-in-the-QgHjYL8hNv
SP - 3055
EP - 3084
VL - 89
IS - 6
DP - DeepDyve
ER -