Price-Formats as a Source of Price Dispersion: A Study of Online and Offline Prices in the Domestic US Airline Markets

摘要: A large body of research in economics, information systems and marketing has sought to understand sources price dispersion. Previous empirical work mainly offered consumer and/or product based explanations for this phenomenon. In contrast, our explores the key role played by vendors’ price-format adoption explaining We empirically analyze half-million online offline prices major U.S. airlines top 500 domestic markets. Our study shows that a vendor’s remains an important source dispersion both channels even after accounting other factors known impact airline ticket prices. Importantly, finding is true transacted posted tickets. document several interesting findings. First, lower variance EDLP firms serves reduce market-level when such are present. Moreover, non-EDLP these markets also than those which competitors absent. Second, we find increases closer departure date, consistent with theoretical assertion reservation Finally, continue observe vendor strategy dispersion, suggesting unlikely converge presence sophisticated search mechanisms.