Related papers: Multimarket Contact, Merger, and Airline Collusion
Pricing algorithms have demonstrated the capability to learn tacit collusion that is largely unaddressed by current regulations. Their increasing use in markets, including oligopolistic industries with a history of collusion, calls for…
We develop a model of inter-temporal and intra-temporal price discrimination by monopoly airlines to study the ability of different discriminatory pricing mechanisms to increase efficiency and the associated distributional implications. To…
This study investigates how the layout and density of seats in aircraft cabins influence the pricing of airline tickets on domestic flights. The analysis is based on microdata from boarding passes linked to face-to-face interviews with…
This paper investigates the benefits of incorporating diversification effects into the pricing process of insurance policies from two different business lines. The paper shows that, for the same risk reduction, insurers pricing policies…
Collusion in market pricing is a concept associated with human actions to raise market prices through artificially limited supply. Recently, the idea of algorithmic collusion was put forward, where the human action in the pricing process is…
The air transportation market is highly competitive and dynamic. Airlines often form alliances to expand their network reach, improve operational efficiency, and enhance customer experience. However, the impact of these alliances on market…
We introduce pricing formulas for competition and collusion models of two-sided markets with an outside option. For the competition model, we find conditions under which prices and consumer surplus may increase or decrease if the outside…
In this paper, we examine the effect of various contracts between a socially concerned airport and an environmentally conscious airline regarding their profitability and channel coordination under two distinct settings. First, we consider…
The prospect of collusive agreements being stabilized via the use of pricing algorithms is widely discussed by antitrust experts and economists. However, the literature is often lacking the perspective of computer scientists, and seems to…
In the rapidly evolving landscape of eCommerce, Artificial Intelligence (AI) based pricing algorithms, particularly those utilizing Reinforcement Learning (RL), are becoming increasingly prevalent. This rise has led to an inextricable…
This paper develops a flexible approach to predict the price effects of horizontal mergers using ML/AI methods. While standard merger simulation techniques rely on restrictive assumptions about firm conduct, we propose a data-driven…
We bridge quasi-experimental and structural approaches for robust merger evaluation. First, we show that the difference-in-differences (DiD) equation is the "reduced form" of a structural model, where demand and cost parameters identify…
This study investigates how the layout and seat density in aircraft cabins influence the pricing of airline tickets on domestic flights. The analysis is based on microdata from boarding passes linked to face-to-face interviews with…
The rise of algorithmic pricing in online retail platforms has attracted significant interest in how autonomous software agents interact under competition. This article explores the potential emergence of algorithmic collusion -…
Autonomous pricing algorithms are increasingly influencing competition in digital markets; however, their behavior under realistic demand conditions remains largely unexamined. This paper offers a thorough analysis of four pricing…
This paper examines the relationship between changes in telecommunications provider concentration on international long distance routes and changes in prices on those routes. Overall, decreased concentration is associated with significantly…
The European Union Emissions Trading System is set to substantially increase the effective carbon price faced by airlines. To quantify the impact of this carbon regulation on the European airline industry, we estimate a two-stage model of…
We develop a model of algorithmic pricing that shuts down every channel for explicit or implicit collusion while still generating collusive outcomes. We analyze the dynamics of a duopoly market where both firms use pricing algorithms…
We study how delegating pricing to large language models (LLMs) can facilitate collusion in a duopoly when both sellers rely on the same pre-trained model. The LLM is characterized by (i) a propensity parameter capturing its internal bias…
Nowadays, a significant share of the Business-to-Consumer sector is based on online platforms like Amazon and Alibaba and uses Artificial Intelligence for pricing strategies. This has sparked debate on whether pricing algorithms may tacitly…