PRICE_DISCRIMINATION_IN_THE_AIRLINE_INDUSTRY：在航空业的价格歧视.pdf

PRICE DISCRIMINATION IN THE AIRLINE INDUSTRY Frode Steen and Lars Sørgard Department of Economics Norwegian School of Economics and Business Administration Helleveien 30, 5045 Bergen NORWAY Emails: frode.steen@nhh.no and lars.sorgard@nhh.no Abstract: The purpose of this report is to discuss the welfare effects of different kinds of price discrimination schedules that are used in the airline industry. We distinguish between versioning, discount to large consumers, and frequent flyer programs. It is argued that versioning is probably welfare improving, especially in a competitive setting. Furthermore, it is argued that discounts to large firm has an ambiguous effect on welfare in monopoly, while it is likely that it is detrimental to welfare in a competitive setting or in a setting with a dominant carrier threatened by entry. Finally, we argue that frequent flyer programs have anticompetitive effects in an oligopoly, and especially in a setting where an established is threatened by entry, so that such programs are expected to be detrimental to welfare. Report submitted to the committee analyzing the airline industry in the Nordic countries, with members from the Competition Authorities in Denmark, Finland, Norway and Sweden © Steen and Sørgard 1 1. INTRODUCTION Price discrimination is observed in most industries. It implies that firms are charging different prices from different consumers, and that the price di