On the Effect of Strategic Consumer Behavior: Pricing Evidence From the Airline Industry

摘要: The operations literature has increasingly accounted for the presence of strategic consumer behavior. Theory suggests that such a behaviour exposes firms to intertemporal competition and exerts downwards pressure on prices. However, little evidence exists demonstrate outcome effect magnitude effects This paper fills this gap by providing supported online decision support tools. Online tools provide consumers with information about future distributions prices studies whether availability affects transacted We conduct an empirical analysis in context airline industry, where airfares are associated frequent changes. study at route level find significant price differences between routes which airfare prediction is available, without information. fare lower airfares. was consistent across different percentiles amounted transactions approximately 3% lower. further while most profound shortly after introduced, negative persists long run. Interestingly, we do not low cost carriers affected information, whereas legacy all percentiles. Our results lend notion make statistically economic impact. Presumably, able exploit available behave more strategically.