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Title:Market power, efficiencies, and entry: Evidence from an airline merger PDF Logo
Authors:Hüschelrath, Kai
Müller, Kathrin
Issue Date:2012
Series/Report no.:ZEW Discussion Papers 12-070
Abstract:We investigate the competitive effects of the merger between Delta Air Lines and Northwest Airlines (2009) in the domestic U.S. airline industry. Applying fixed effects regression models we find that the transaction led to short term price increases of about 11 percent on overlapping routes and about 10 percent on routes which experienced a merger-induced switch of the operating carrier. Over a longer period, however, our analysis reveals that both merger efficiencies and post-merger entry by competitors initiated a downward trend in prices leaving consumers with a small net price increase of about 3 percent on the affected routes.
Subjects:airline industry
merger
market power
efficiencies
entry-inducing effects
JEL:L40
L93
Persistent Identifier of the first edition:urn:nbn:de:bsz:180-madoc-326227
Document Type:Working Paper
Appears in Collections:ZEW Discussion Papers
Publikationen von Forscherinnen und Forschern des ZEW

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