Investigating the effects of economies of scope on firms' pricing behavior: Empirical evidence from the US domestic airline industry
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作者:
Hofer, Christian
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Univ Arkansas, Sam M Walton Coll Business, Dept Mkt & Logist, Fayetteville, AR 72701 USAUniv Arkansas, Sam M Walton Coll Business, Dept Mkt & Logist, Fayetteville, AR 72701 USA
Hofer, Christian
[1
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Eroglu, Cuneyt
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Univ Arkansas, Sam M Walton Coll Business, Dept Mkt & Logist, Fayetteville, AR 72701 USAUniv Arkansas, Sam M Walton Coll Business, Dept Mkt & Logist, Fayetteville, AR 72701 USA
Eroglu, Cuneyt
[1
]
机构:
[1] Univ Arkansas, Sam M Walton Coll Business, Dept Mkt & Logist, Fayetteville, AR 72701 USA
This study investigates to what extent cross-product (belly cargo) output affects (passenger ticket) prices in the US domestic airline industry. The empirical analysis indicates that greater cargo volumes generally result in lower air fares, presumably as a result of the airlines' realization of economies of scope. This magnitude of this price effect, however, depends on certain firm and route market characteristics. The findings of this study add to extant research on economies of scope, multi-product yield management and airline pricing and provide important insights for policy makers and airline managers alike. (C) 2009 Elsevier Ltd. All rights reserved.
机构:
Univ Texas Rio Grande Valley, Dept Econ & Finance, 1201 W Univ Dr, Edinburg, TX 78539 USAUniv Texas Rio Grande Valley, Dept Econ & Finance, 1201 W Univ Dr, Edinburg, TX 78539 USA
Mollick, Andre Varella
Amin, Md Ruhul
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Univ Texas Rio Grande Valley, Dept Econ & Finance, 1201 W Univ Dr, Edinburg, TX 78539 USAUniv Texas Rio Grande Valley, Dept Econ & Finance, 1201 W Univ Dr, Edinburg, TX 78539 USA