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Code‐sharing Agreements and Interconnections in Markets for International Flights
Author(s) -
Hassin Orit,
Shy Oz
Publication year - 2004
Publication title -
review of international economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.513
H-Index - 58
eISSN - 1467-9396
pISSN - 0965-7576
DOI - 10.1111/j.1467-9396.2004.00453.x
Subject(s) - code (set theory) , pareto principle , industrial organization , business , welfare , market share , microeconomics , computer science , economics , international trade , operations management , marketing , market economy , set (abstract data type) , programming language
The paper investigates the consequences of code‐sharing agreements among airline firms competing on international routes, where some passengers interconnect to flights originating or terminating at cities not served by foreign airlines. The authors calculate the precise market share captured by flights operated under code sharing. They compare airfares, market shares, profits, and passengers’ welfare before and after the implementation of a code‐sharing agreement and demonstrate that code sharing is Pareto‐improving.