Joanna Stavins

Price Discrimination in the Airline Market: The Effect of Market Concentration

We test the hypothesis that price discrimination increases with competition in the airline market. Using a large cross section of tickets offered by several carriers on various routes, we approximate price discrimination with marginal implicit prices of ticket restrictions that carriers typically use to price discriminate: Saturday-night stayover re-quirements and advanced-purchase discounts. We find that the restrictions are associated with lower airfares, but that the discounts are smaller on routes with higher market concentration. The results suggest that price dispersion attributed to ticket restrictions increases as markets becomemore competitive.

Model Entry and Exit in a Differentiated-Product Industry: The Personal Computer Market

Entry and exit literature focuses almost exclusively on firm-level decisions, leaving out an important aspect of firm behavior: whether to introduce new models while the firm produces similar goods and where to locate them in the existing product space, taking into account own models and the possibility of new entry. This paper analyzes model entry and exit decisions in the case of the personal computer market. Differences in new model spatial location between incumbents and entrants are found, while both model overpricing and firm reputation are found to be significant in the probability of models exit estimation. Copyright 1995 by MIT Press.

Merchant steering of consumer payment choice: lessons learned from consumer surveys

Recent policy changes allow merchants to influence consumers’ choice of payment instruments by offering price discounts and other incentives. This report describes lessons learned from using consumer survey responses to assess whether merchants tried to influence buyers’ choice of payment method. To measure the effects of these recent policy changes, we included questions about merchant steering in pilot versions of a new diary survey of U.S. consumers. Our findings are inconclusive because some respondents interpreted the questions differently from the way we intended. This report aims to explain why the diary survey failed to deliver the desired results, and to suggest better ways to use surveys to evaluate the effects of policy changes in the future.