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Unformatted text preview: 1997) shows that each type of alliance has a different impact on economic welfare; complementary alliances are likely to increase it. Finally, Lin (2004) proposes a game where airlines can choose the roles of fare-leader and fare-follower in the allied markets.4
3 4 Economist (10/04/2003). The effect of airline alliances has been empirically investigated by Oum et al. (1996), Park and Zhang (1998), Brueckner and Whalen (2000), Brueckner (2003), among many others. These studies provide evidence that international alliances lead to lower fares, increases in the number of passengers on the relevant routes and that airline cooperation 3 The network structure is typically assumed exogenous and although earlier analyses have looked at several structures, none of them has considered the one proposed in the present study. It is conveniently constructed to take into account the type of collaboration among partners in the same alliance, contemplates the use of different hub airports and allows us to model competition between substitute routes when each route is composed of complementary trips. We will as...
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This note was uploaded on 05/12/2010 for the course MAN 6721 taught by Professor Kraft during the Spring '10 term at University of Florida.
- Spring '10