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We develop a two-stage game in which competing airlines first choose the networks of markets to serve in the first stage before competing in price in the second stage. Spillovers in entry decisions across markets are allowed, which accrue on the demand, marginal cost, and fixed cost sides. We...
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oligopoly. Our analysis reveals that the complete network, where each firm collaborates with all others, is uniquely stable …, industry-profit maximizing and efficient. This result is in contrast with earlier contributions in private oligopoly where …
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