Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
1142395 | Operations Research Letters | 2012 | 4 Pages |
Abstract
This work investigates whether an airline should offer vertically differentiated services that are substitutes for its own services. Under a general setting, we show that offering only one type of service in any particular city-pair market is necessary for the airline’s profit maximization. This result justifies a common assumption in the literature that an airline offers only one type of service in a particular market. Further, this result can explain the empirical finding that airlines that offer a one-stop service are less likely to provide a nonstop service in the same market than those that do not do so.
Keywords
Related Topics
Physical Sciences and Engineering
Mathematics
Discrete Mathematics and Combinatorics
Authors
Tomohiko Kawamori, Ming Hsin Lin,