Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/69605
Authors: 
Brueckner, Jan K.
Luo, Dan
Year of Publication: 
2013
Series/Report no.: 
CESifo Working Paper: Industrial Organisation 4066
Abstract: 
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 competing airlines. A positive reaction function slope is found in some cases, indicating the presence of strategic interaction in the choice of frequencies. The paper also asks whether multimarket contact generates mutual forbearance in frequency competition, finding no evidence for such an effect.
Subjects: 
airlines
reaction function
product quality
flight frequency
JEL: 
L10
L93
Document Type: 
Working Paper

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