Is multimarket contact an antitrust concern? A case of China’s airline market
Article
Article Title | Is multimarket contact an antitrust concern? A case of China’s airline market |
---|---|
ERA Journal ID | 4298 |
Article Category | Article |
Authors | Ma, Wenliang (Author), Wang, Qiang (Author), Yang, Hangjun (Author) and Zhang, Yahua (Author) |
Journal Title | Transportation Research Part A: Policy and Practice |
Journal Citation | 132, pp. 515-526 |
Number of Pages | 12 |
Year | 2020 |
Publisher | Elsevier |
Place of Publication | United Kingdom |
ISSN | 0191-2607 |
0965-8564 | |
Digital Object Identifier (DOI) | https://doi.org/10.1016/j.tra.2019.12.008 |
Web Address (URL) | https://www.sciencedirect.com/science/article/pii/S0965856419317550 |
Abstract | When firms meet in more than one market, it is generally regarded that the possibility of collusion will increase because of mutual interdependence (or mutual forbearance). Mutual forbearance is tacit collusion that directly results from familiarity and deterrence. This paper examines the effect of multimarket contact on airline prices in the Chinese domestic airline market where private and low-cost carriers have been thriving and high-speed rail services growing quickly in the last few years. We find strong evidence supporting the mutual forbearance hypothesis in high revenue markets. We also find that the collusive effect due to increasing multimarket contact is insignificant within the same airline group, whereas multimarket contact between airlines in different airline groups triggers higher airfares. |
Keywords | Multimarket contact; Price collusion; Mutual forbearance; China; Airline pricing |
ANZSRC Field of Research 2020 | 350901. Air transportation and freight services |
380109. Industry economics and industrial organisation | |
380117. Transport economics | |
Byline Affiliations | Capital University of Economics and Business, China |
University of International Business and Economics, China | |
School of Commerce | |
Institution of Origin | University of Southern Queensland |
https://research.usq.edu.au/item/q57x1/is-multimarket-contact-an-antitrust-concern-a-case-of-china-s-airline-market
255
total views10
total downloads2
views this month0
downloads this month