Measuring Evidence of Peak-Load Pricing and Consumer Heterogeneities in Airline Pricing (original) (raw)

This paper assesses two leading classes of theories that model price dispersion in airline pricing. Using unique data on ticket transactions, we explore whether price dispersion arises from a problem of allocating scare seat capacity in the face of uncertain demand, or from a problem of segmenting consumers using ticket restrictions, or some combination of both. We find only modest support for the first class of models. for helpful discussions. Manuel Hernandez provided excellent research assistance.