TY  - JOUR
AU  - Borenstein,Severin
AU  - Rose,Nancy L.
TI  - Competition and Price Dispersion in the U.S. Airline Industry
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 3785
PY  - 1995
Y2  - February 1995
UR  - http://www.nber.org/papers/w3785
L1  - http://www.nber.org/papers/w3785.pdf
N1  - Author contact info:
Severin Borenstein
Haas School of Business
University of California, Berkeley
Berkeley, CA 94720-1900
Tel: 510/642-3689
E-Mail: borenste@haas.berkeley.edu

Nancy L. Rose
National Bureau of Economic Research
1050 Massachusetts Avenue
Cambridge, MA  02138
Tel: 617-613-1246
E-Mail: nrose@mit.edu
M2  - featured in NBER digest on 1991-10-01
AB  - This papers analyzes dispersion in the prices that an airline charges to different customers on the same route. Such variation in airlines fares is substantial: the expected absolute difference in fares between two of an airline's passengers on a route averages thirty-six percent of the airline's average ticket price on the route. The pattern of price dispersion that we find does not seem to be explained solely by cost differences. Dispersion is higher on more competitive routes, possibly reflecting a pattern of discrimination against customers who are less willing to switch to alternative flights or airlines. We argue that the data support an explanation based on theories of price discrimination in monopolistically competitive industries.
ER  -