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Airline mergers and multimarket contact
Author(s) -
Singal Vijay
Publication year - 1996
Publication title -
managerial and decision economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.288
H-Index - 51
eISSN - 1099-1468
pISSN - 0143-6570
DOI - 10.1002/(sici)1099-1468(199611)17:6<559::aid-mde795>3.0.co;2-k
Subject(s) - measure (data warehouse) , microeconomics , industrial organization , business , economics , affect (linguistics) , computer science , linguistics , philosophy , database
This paper examines changes in the pricing behavior of airline firms around mergers that occurred during 1985–8. We find that the changes in concentration, a measure of contact within a market, and changes in multimarket contact, a measure of contact with the same firms outside of that market, significantly affect airfares. Further, increases in multimarket contact alone are sufficient to effect an increase in fares. Antitrust policy must consider changes not only in concentration but also in multimarket contact to evaluate more fully the effect of consolidations on consumers.