Market Structure and Multiple Equilibria in Airline Markets
提出一种估计完全信息静态离散博弈中玩家收益函数的方法，允许航空公司间存在一般形式的异质性，并应用于美国航空业，发现大型航空公司与低成本航空公司的竞争效应不同，且机场存在度影响竞争效应。
We provide a practical method to estimate the payoff functions of players in complete information, static, discrete games. With respect to the empirical literature on\nentry games originated by Bresnahan and Reiss (1990) and Berry (1992), the main novelty of our framework is to allow for general forms of heterogeneity across players without making equilibrium selection assumptions. We allow the effects that the entry of each individual airline has on the profits of its competitors, its “competitive effects,” \nto differ across airlines. The identified features of the model are sets of parameters (partial identification) such that the choice probabilities predicted by the econometric\nmodel are consistent with the empirical choice probabilities estimated from the data.\nWe apply this methodology to investigate the empirical importance of firm heterogeneity as a determinant of market structure in the U.S. airline industry. We find evidence\nof heterogeneity across airlines in their profit functions. The competitive effects of large airlines (American, Delta, United) are different from those of low cost carriers\nand Southwest. Also, the competitive effect of an airline is increasing in its airport presence, which is an important measure of observable heterogeneity in the airline industry.\nThen we develop a policy experiment to estimate the effect of repealing the Wright Amendment on competition in markets out of the Dallas airports. We find that repealing theWright Amendment would increase the number of markets served out of\nDallas Love.