Does multimarket contact facilitate tacit collusion? Inference on conduct parameters in the airline industry

• 成果类型: Article
• 署名作者: Ciliberto, Federico; Williams, Jonathan W.
• 署名单位: University of Virginia; University System of Georgia; University of Georgia
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• DOI: 10.1111/1756-2171.12070
• 发表日期: 2014
• 页码: 764-791
• 关键词: american automobile-industry; oligopoly solution concept; discrete-choice models; market power; dynamic oligopoly; price; BEHAVIOR; sales; entry

摘要

We provide empirical evidence that multimarket contact facilitates tacit collusion among airlines using a flexible model of oligopolistic behavior, where conduct parameters are modelled as functions of multimarket contact. We find (i) carriers with little multimarket contact do not cooperate in setting fares, whereas carriers serving many markets simultaneously sustain almost perfect coordination; (ii) cross-price elasticities play a crucial role in determining the impact of multimarket contact on equilibrium fares; (iii) marginal changes in multimarket contact matter only at low or moderate levels of contact; (iv) assuming firms behave as Bertrand-Nash competitors leads to biased estimates of marginal costs.