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- ISIDORE Id: 10670/1.22c69c...
- halshs: halshs-03359597
info:eu-repo/semantics/OpenAccess
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Balancing (Physics) Balance (Physics) Balance Air transportation industry Aviation industry Air carriers Airline industry Air lines Scheduled airlinesCiter ce document
Philippe Gagnepain et al., « Strategic uncertainty and market size: An illustration on the Wright amendment », HAL SHS (Sciences de l’Homme et de la Société), ID : 10670/1.22c69c...
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This paper exploits the repeal of the Wright amendment as a natural experiment in order to contribute to the ongoing discussion on how the enlargement of the relevant market affects the ability of firms to coordinate on a Nash equilibrium. Using data on the U.S. air transportation industry, we present a Difference-inDifference procedure which sheds light on the significant loss of accuracy in airlines' predictions in markets originating in Dallas after the Love Field airport started operating long distance services in 2014. This suggests that competition authorities should be careful when they refer to the Nash equilibrium following market expansion reforms.
