Recent literature finds evidence that prices decrease during demand peaks. This paper argues that the price decrease is an artefact of ignoring product differentiation. We develop a simple individual demand model which shows that at periods of exogenous high demand, consumers migrate towards...

This study examines the economic consequences of a horizontal merger between Japanese airlines that took place in 2002, with particular emphasis on quality responses to the airline merger. A structural model allows firms to determine not only prices but also flight frequencies. The obtained...