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Are Airlines' Price-Setting Strategies Different?

Discussion Papers 645, 12 S.

Volodymyr Bilotkach, Yuriy Gorodnichenko, Oleksandr Talavera, Igor Zubenko

2006. Nov.

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Using a sample of fare quotes for non-stop travel from New York to London, this paper investigates the dynamics of offered fares as the departure date nears. We find that the general trend is toward fare increase at an accelerated rate as the departure date approaches. Clear differences in price-setting strategies among the carriers competing on a particular route are documented.

JEL-Classification: L93;D21
Keywords: airline industry, price dynamics
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