This paper investigates the response of full service carriers (FSCs) to the entry of low-cost carriers (LCCs). We develop a model of airline competition, which accommodates various market structures, some of which include low-cost players. Using data on published airfares of Lufthansa, British...

We consider a multi-period, limited capacity, unsegmented airline pricing model whose solution returns a sequence of increasing prices based on the order of sale. We show that a positive demand shock corresponding to an increase in the arrival rate reduces within-period price dispersion and has...

Using data from easyJet, Ryanair and Southwest, we show that for their flights these airlines set a sequence, based on the seats' order of sale, of non-strictly monotone increasing fares. A model where prices cannot be continuously adjusted due to organizational frictions and technological...

This paper investigates the properties of two types of cost restrictions that guarantee the existence of an equilibrium in pure strategies in Bayesian spatial competition models with heterogenous firms.

The paper extends the Salop model of localized competition by allowing frms to have heterogeneous costs. We provide a general but highly tractable analytical solution for the equilibrium prices, and we study the long-run properties of the model using two different entry games. We show that cost...

This paper investigates the properties of two types of cost restrictions that guarantee the existence of an equilibrium in pure strategies in Bayesian spatial competition models with heterogeneous firms.

This paper investigates the response of full service carriers (FSCs) to the entry of low-cost carriers (LCCs). We develop a model of airline competition, which accommodates various market structures, some of which include low-cost players. Using data on published airfares of Lufthansa, British...

This paper compares alternative licensing schemes of a patentor, that is, at the same time, a producer within an industry. The licensing scheme can assume the form of a royalty per unit of output, a fixed fee, or a fixed fee with maximum authorized production. We show that, when the innovation...