Market Conduct in the Airline Industry: An Empirical Investigation
Abstract
This article calculates conduct parameters (or "conjectural variations") for a set of duopoly airline routes. We estimate the mean conduct parameter for each airline and draw inferences about whether Bertrand, Cournot, or cartel models are supported by the data. Some sensitivity analysis with respect to underlying parameters is also carried out. In general, we find that the Cournot model seems much more consistent with the data than either the Bertrand or cartel model.
Integrity signals
Registry
Cites
Statistics
Claims the paper makes
Claims other papers make about this one
Each is checked against this paper’s own text: does it say what the citing paper says it does?
The loss of power is consistent with the data favoring a Cournot model over Bertrand as the relevant model of competition in airlines.
“The loss of power is also consistent with the data favoring a Cournot model over Bertrand as the relevant model of competition in airlines, as previously argued by Brander and Zhang (1990) and the literature that followed.”
From Anticompetitive Effects of Common Ownership (2018) · cites this paper as Brander and Zhang (1990)
The feature of capacity pre-commitments and the previous literature suggest a Cournot model.
“This feature, as well as the previous literature(Brander and Zhang, 1990), suggest a Cournot model.”
From Anticompetitive Effects of Common Ownership (2018) · cites this paper as Brander and Zhang, 1990
Cited by
Sorted by citations
Anticompetitive Effects of Common Ownership
AZAR, J., SCHMALZ, M. C., & TECU, I. (2018) · The Journal of Finance · doi:10.1111/jofi.12698 · Cited by 980 · see citing works
“) The loss of power is also consistent with the data favoring a Cournot model over Bertrand as the relevant model of competition in airlines, as previously argued by Brander and Zhang (1990) and the literature that followed. To further assure robustness to the mode of competition, we investigate if the estimated effec…”
MethodResultInfluential
- Authors
- Brander, J. A., & Zhang, A.
- Venue
- The RAND Journal of Economics
- Publisher
- Wiley
- Published
- 1990
- Volume
- 21
- Issue
- 4
- Pages
- 567
- ISSN
- 0741-6261 (ISSN-L)
- OpenAlex
- W1990645958
- Cited by
- 409
- References
- 0
- Citations by year
- 2026: 9 · 2025: 7 · 2024: 9 · 2023: 9 · 2022: 11 · 2021: 17 · 2020: 17 · 2019: 11 · 2018: 16 · 2017: 16 · 2016: 17 · 2015: 16 · 2014: 18 · 2013: 15 · 2012: 21
- FWCI
- 13.54
- Type
- journal article
- Language
- en
- Open access
- closed
- Locations
- The RAND Journal of Economics (publishedVersion)
- RePEc: Research Papers in Economics (submittedVersion)
- Topics
- Social Sciences › Economics, Econometrics and Finance › General Economics, Econometrics and Finance › Aviation Industry Analysis and Trends
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Merger and Competition Analysis
- Social Sciences › Business, Management and Accounting › Strategy and Management › Transport and Economic Policies
- Keywords
- airline industry, market conduct, conduct parameter, conjectural variations, duopoly, Cournot competition, Bertrand competition, air routes, oligopolistic competition
About these checks
Registry, retraction, Cites and statistics results are computed, not judged, with one exception: a printed reference that no index lists is read once by a model before it counts as a citation error. Claims are extracted by a model and kept only when their quote appears verbatim in the text; each cited source is then checked, with a model’s help, for whether it says what the claim relies on. Those verdicts can be wrong — read the claim’s quote and the cited source before relying on one.
Statistics and arithmetic are recomputed, not judged.
Confidence bands are shown only for fields calibrated on our annotated test set. None is calibrated yet, so no band is shown.
What counts as a claim ›How we measure confidence ›How we check this ›
Are you an author, or do you see a problem with this page? Request a review
