Skip to Main content Skip to Navigation
Preprints, Working Papers, ...

Strategic uncertainty and market size: An illustration on the Wright amendment

Abstract : 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.
Document type :
Preprints, Working Papers, ...
Complete list of metadata

https://halshs.archives-ouvertes.fr/halshs-03359597
Contributor : Caroline Bauer Connect in order to contact the contributor
Submitted on : Thursday, September 30, 2021 - 12:16:25 PM
Last modification on : Friday, October 15, 2021 - 1:41:45 PM

File

wp_202153_.pdf
Files produced by the author(s)

Identifiers

  • HAL Id : halshs-03359597, version 1

Collections

Citation

Philippe Gagnepain, Stéphane Gauthier. Strategic uncertainty and market size: An illustration on the Wright amendment. 2021. ⟨halshs-03359597⟩

Share

Metrics

Record views

57

Files downloads

10