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A Model of Dynamic Limit Pricing with an Application to the Airline Industry
Gedge, Christopher; Roberts, James W.; Sweeting, Andrew - National Bureau of Economic Research (NBER) - 2014
The one-shot nature of most theoretical models of strategic investment, especially those based on asymmetric information, limits our ability to test whether they can fit the data. We develop a dynamic version of the classic Milgrom and Roberts (1982) model of limit pricing, where a monopolist...
Persistent link: https://www.econbiz.de/10010796729
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Sunk Costs and Risk-Based Barriers to Entry
Pindyck, Robert S. - National Bureau of Economic Research (NBER) - 2009
In merger analysis and other antitrust settings, risk is often cited as a potential barrier to entry. But there is little consensus as to the kinds of risk that matter - systematic versus non-systematic and industry-wide versus firm-specific - and the mechanisms through which they affect entry....
Persistent link: https://www.econbiz.de/10005777752
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Sunk Costs and Real Options in Antitrust
Pindyck, Robert S. - National Bureau of Economic Research (NBER) - 2005
Sunk costs play a central role in antitrust economics, but are often misunderstood and mismeasured. I will try to clarify some of the conceptual and empirical issues related to sunk costs, and explain their implications for antitrust analysis. I will be particularly concerned with the role of...
Persistent link: https://www.econbiz.de/10005011922
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Imperfect Competition in Selection Markets
Mahoney, Neale; Weyl, E. Glen - National Bureau of Economic Research (NBER) - 2014
subprime auto lending calibrated to Einav, Jenkins and Levin (2012), realistic levels of competition among lenders generate a … significant oversupply of credit, implying greater market power is desirable. We build a model of symmetric imperfect competition …-theoretic reasoning to provide a general analysis of the interaction between selection and imperfect competition. We use the same logic to …
Persistent link: https://www.econbiz.de/10010890106
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The Smart Grid, Entry, and Imperfect Competition in Electricity Markets
Allcott, Hunt - National Bureau of Economic Research (NBER) - 2012
Most US consumers are charged a near-constant retail price for electricity, despite substantial hourly variation in the wholesale market price. The Smart Grid is a set of emerging technologies that, among other effects, will facilitate "real-time pricing" for electricity and increase price...
Persistent link: https://www.econbiz.de/10011271447
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Do Airlines in Chapter 11 Harm Their Rivals? Bankruptcy and Pricing Behavior in U.S. Airline Markets
Borenstein, Severin; Rose, Nancy Lin - National Bureau of Economic Research (NBER) - 1995
The behavior of firms in financial distress has attracted considerable academic and policy interest in recent years. The turmoil in the U.S. airline industry has triggered much of the public policy discussion, as some observers have argued that airlines in financial distress, particularly those...
Persistent link: https://www.econbiz.de/10005714697
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How Airline Markets Work...Or Do They? Regulatory Reform in the Airline Industry
Borenstein, Severin; Rose, Nancy Lin - National Bureau of Economic Research (NBER) - 2007
have occurred in pricing, service, and competition in the 28 years since deregulation. We then examine some of the major … public policy issues facing the industry: (a) the sustainability of competition and volatility of airline profits, (b …
Persistent link: https://www.econbiz.de/10005777407
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Tracing the Woes: An Empirical Analysis of the Airline Industry
Berry, Steven; Barwick, Panle Jia - National Bureau of Economic Research (NBER) - 2008
The U.S. airline industry went through tremendous turmoil in the early 2000's. There were four major bankruptcies and two major mergers, with all legacy carriers reporting a large profit reduction. This paper presents a structural model of the airline industry, and estimates the impact of demand...
Persistent link: https://www.econbiz.de/10005777764
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Airline Schedule Recovery after Airport Closures: Empirical Evidence Since September 11th
Rupp, Nicholas G.; DeSimone, Jeffrey S; Holmes, George M. - National Bureau of Economic Research (NBER) - 2003
Since the September 11, 2001 terrorist attacks, repeated airport closures due to potential security breaches have imposed substantial costs on travelers, airlines, and government agencies in terms of flight delays and cancellations. Using data from the year following September 11th, this study...
Persistent link: https://www.econbiz.de/10005778572
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On the Persistent Financial Losses of U.S. Airlines: A Preliminary Exploration
Borenstein, Severin - National Bureau of Economic Research (NBER) - 2011
, analysts, and researchers -- including high taxes and fuel costs, weak demand, and competition from lower-cost airlines …
Persistent link: https://www.econbiz.de/10008804667