Frequent flier plans (FFPs) may be the most famous of customer loyalty programs and plans created on the FFP model are now offered by sellers in a number of other industries. We present a theory of FFPs that models them as efforts to take advantage of the agency relationship between employers -...

Dynamic pricing is increasingly popular in the perishable good markets, but its effect under competition is uncertain due to the potential for the prisoner's dilemma. I study profit and welfare implications of dynamic pricing techniques in a competitive setting. I construct a structural dynamic...

In this paper we study the impact of competition on the provision of quality in the US airline industry. Using changes in competition triggered by LCC entry and airline mergers, we find that an increase in competition increases the provision of quality of major incumbent and non-merging airlines...

We posit and empirically test the hypothesis that airlines are able to charge a fare premium in markets that originate in their domestic country relative to similar markets that originate in foreign countries. To this end, we focus on intercontinental one-stop air travel trips for which the...

We posit and empirically test the hypothesis that airlines are able to charge a fare premium in markets that originate in their domestic country relative to similar markets that originate in foreign countries. To this end, we focus on intercontinental one-stop air travel trips for which the...

This study addresses two issues relating to the pricing behaviour of European airlines: 1) whether an airline's dominant position at the origin airport, at the route and the city-pair level affects the airlines' market power; 2) whether fares follow a monotonic time path consistent with the...

Over the last 20 years, demand for air passenger transport has grown dramatically. At the same time, the two largest domestic airlines merged and several smaller entrants exited without being able to make significant inroads. As a result, the industry is highly concentrated, with a dominant firm...

Over the last 20 years, demand for air passenger transport has grown dramatically. At the same time, the two largest domestic airlines merged and several smaller entrants exited without being able to make significant inroads. As a result, the industry is highly concentrated, with a dominant firm...

If cutting price can trigger a price war, then a firm must weigh present versus future gains and losses when considering such a move. How a firm values such tradeoffs can be affected by its financial situation. Using data on 14 major airlines between 1985 and 1992, this paper tests the...