We study how organizational boundaries affect pricing decisions using comprehensive data provided by a large U.S. airline. We show that contrary to prevailing theories of the firm, advanced pricing algorithms have multiple biases. To quantify the impacts of these biases, we estimate a structural...

This paper investigates strategic interaction among airlines in product-quality choices. Using an instrumental variables approach, the paper estimates flight-frequency reaction functions, which relate an airline’s frequency on a route to its own characteristics and to the frequencies of...

In this study, it is firstly discussed how Bilateral Air Services Agreements (BASAs) and as a result the economic regulations in the international airline markets affect the management of scheduled airlines. By considering the introduced effects, a scale is developed to evaluate the BASAs of...

This article provides evidence from the airline industry on the competitive effects of grants of antitrust immunity by regulatory agencies to certain joint venture agreements. In the airline industry, the U.S. Department of Transportation retains the statutory authority to approve and immunize...

We analyze a sample of fare quotes, collected from the three leading on-line travel agents on fifty large US airline markets. Looking at the lowest fares available, we determine competition between the travel agents ensures the consumer can get a better deal. The travel agents compete more on...

We compare fares offered by Southwest Airlines to those found through Orbitz on-line travel agency. We find that lowest last-minute fares, offered by Southwest, are on average 8.5% higher than the lowest fares one can find on Orbitz. We determine that Southwest offers higher fares as compared to...

While transaction-cost economics has considered the effect of make-or-buy decisions on expected product performance, research has not explored the effect of make-or-buy decisions on variability of product performance (i.e., reliability). We argue that firms that differentiate their products by...

Although typically modeled as a centralized firm decision, pricing often involves multiple organizational teams that have decision rights over specific pricing inputs. We study team input decisions using comprehensive data from a large U.S. airline. We document that pricing at a sophisticated...

This paper studies the contribution of demand, costs, and strategic factors to the adoption of hub-and-spoke networks in the US airline industry. Our results are based on the estimation of a dynamic oligopoly game of network competition that incorporates three groups of factors which may explain...

This paper examines how the Workers'Compensation (WC) and the Unemployment Insurance (UI) programs interact to influence the duration of claims due to workplace accidents. In this paper, we use Market Share Instability (MSI) as a measure of the intensity of competition among airlines on a...