Airline mergers and multimarket contact

Airline mergers and multimarket contact This paper examines changes in the pricing behavior of airline firms around mergers that occurred during 1985–8. We find that the changes in concentration, a measure of contact within a market, and changes in multimarket contact, a measure of contact with the same firms outside of that market, significantly affect airfares. Further, increases in multimarket contact alone are sufficient to effect an increase in fares. Antitrust policy must consider changes not only in concentration but also in multimarket contact to evaluate more fully the effect of consolidations on consumers. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Managerial and Decision Economics Wiley

Airline mergers and multimarket contact

Managerial and Decision Economics, Volume 17 (6) – Nov 1, 1996

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Publisher
Wiley
Copyright
Copyright © 1996 John Wiley & Sons, Ltd.
ISSN
0143-6570
eISSN
1099-1468
D.O.I.
10.1002/(SICI)1099-1468(199611)17:6<559::AID-MDE795>3.0.CO;2-K
Publisher site
See Article on Publisher Site

Abstract

This paper examines changes in the pricing behavior of airline firms around mergers that occurred during 1985–8. We find that the changes in concentration, a measure of contact within a market, and changes in multimarket contact, a measure of contact with the same firms outside of that market, significantly affect airfares. Further, increases in multimarket contact alone are sufficient to effect an increase in fares. Antitrust policy must consider changes not only in concentration but also in multimarket contact to evaluate more fully the effect of consolidations on consumers.

Journal

Managerial and Decision EconomicsWiley

Published: Nov 1, 1996

References

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