Tacit Collusion and Price Dispersion in the Presence of Southwest Airlines

2019 ◽  
Author(s):  
Donggeun Kim ◽  
Myongjin Kim ◽  
Kerry M. Tan
Keyword(s):  
Price Dispersion ◽  
Tacit Collusion ◽  
Southwest Airlines

E-Markets and Competition

2004 ◽  
pp. 72-81 ◽  
Author(s):  
A. Kuznetsov
Keyword(s):  
Market Power ◽  
Price Dispersion ◽  
Empirical Studies ◽  
Electronic Markets ◽  
High Price ◽  
Tacit Collusion ◽  
Brand Name ◽  
Menu Costs ◽  
High Concentration ◽  
Low Costs

Electronic markets are thought to be perfectly efficient in terms of price levels, price dispersion, menu costs and the number of competitive sellers in the market. Indeed, menu costs and prices are usually lower online, but some empirical studies have found that electronic markets are characterised by high price dispersion and high concentration of market power. The author suggests that because of low costs of searching and acquiring information, small number of sellers and low menu costs electronic markets provide better conditions for tacit collusion. The fact that sellers are able to react to competitors' actions faster than buyers may even foster prices to increase. Tighter online competition forces each seller to differentiate from others by advertising his own brand name. In a static equilibrium an increase of the number of buyers may lead to escalation of advertising expenses and force less efficient sellers out of the market.

A Strategic Profitability Analysis of Southwest Airlines: Applying the Horngren, Datar and Foster Approach

2007 ◽  
Author(s):  
Charles D. Bailey ◽  
Allison Collins ◽  
Denton Collins ◽  
Kenneth R. Lambert
Keyword(s):  
Profitability Analysis ◽  
Southwest Airlines
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