We extend the theory of bilateral vertical contracting to a double moral hazard setting where upstream and downstream firms make complementary investments that enhance demand, downstream firms make fixed investments to enter the downstream market, and contracts are private information and...

We develop a methodology that quantifies from data on itinerary demand consumers' valuations of the characteristics of airline networks, and show that airline network effects are highly valued. We show that these effects are crucial for determining consumer impacts of public policies that affect...