Has the “Golden Rule” Lost its Aura? Revisiting Multimarket Contact under Asymmetric Pricing in the U.S. Domestic Airline Industry (COMPLETED RESEARCH)
نویسندگان
چکیده
Extant research suggests that tacit collusion or the “golden rule” of refraining from aggressive pricing in jointly contested markets is an integral feature of the US airline industry. Our research revisits this past wisdom in the presence of airlines that pursue a distinctly different pricing strategy. Amongst airlines, Southwest and JetBlue largely practice an Everyday Low Price (EDLP) price-format which can be best characterized as a portfolio-level pricing strategy while most others engage in some form of temporal fare promotions. In a first study using both posted and transacted airline prices, we examine the impact of asymmetric pricing strategies on the understanding of multimarket contact (MMC). By first ignoring these differences in pricing strategy, we
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