The Welfare Effects of Dynamic Pricing: Evidence From Airline Markets

• 成果类型: Article
• 署名作者: Williams, Kevin R.
• 署名单位: Yale University; National Bureau of Economic Research
• 刊物名称: ECONOMETRICA
• ISSN/ISSBN: 0012-9682
• DOI: 10.3982/ECTA16180
• 发表日期: 2022
• 页码: 831-858
• 关键词: advance-purchase discounts; revenue management; DISCRIMINATION; demand; monopoly; MODEL; inventories; sales

摘要

Airfares fluctuate due to demand shocks and intertemporal variation in willingness to pay. I estimate a model of dynamic airline pricing accounting for both sources of price adjustments using flight-level data. I use the model estimates to evaluate the welfare effects of dynamic airline pricing. Relative to uniform pricing, dynamic pricing benefits early-arriving, leisure consumers at the expense of late-arriving, business travelers. Although dynamic pricing ensures seat availability for business travelers, these consumers are then charged higher prices. When aggregated over markets, welfare is higher under dynamic pricing than under uniform pricing. The direction of the welfare effect at the market level depends on whether dynamic price adjustments are mainly driven by demand shocks or by changes in the overall demand elasticity.