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Competition and market power in the European airline industry: 1976–90

✍ Scribed by Purvez F. Captain; Robin C. Sickles

Publisher
John Wiley and Sons
Year
1997
Tongue
English
Weight
173 KB
Volume
18
Category
Article
ISSN
0143-6570

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✦ Synopsis

In this paper, we study the market power of European airlines in an oligopoly structure with product differentiation for the period 1976-1990 and test the monopoly hypothesis (Captain, 1993). The paper analyzes the level of competition among eight major European airlines and finds little evidence for market power in the industry over that period. One of our main findings is that the high prices in Europe are not entirely due to the bilateral agreements (leading to possible monopoly power), but rather are a result of very high cost structures in the industry. These results are broadly in agreement with those of Roeller and Sickles (1994) which analyzes these issues in the European Industry by estimating a structural, two-stage game. #

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