Escobari, Diego (2011): Dynamic Pricing, Advance Sales, and Aggregate Demand Learning in Airlines. Forthcoming in: Journal of Industrial Economics
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This paper uses a unique U.S. airlines panel data set to empirically study the dynamic pricing of inventories with uncertain demand over a finite horizon. I estimate a dynamic pricing equation and a dynamic demand equation that jointly characterize the adjustment process between prices and sales as the flight date nears. I find that the price increases as the inventory decreases, and decreases as there is less time to sell. Consistent with aggregate demand learning and price adjustment, demand shocks have a positive and much larger effect on prices than the positive effect of anticipated sales.
|Item Type:||MPRA Paper|
|Original Title:||Dynamic Pricing, Advance Sales, and Aggregate Demand Learning in Airlines|
|Keywords:||pricing; demand uncertainty; demand learning; airlines|
|Subjects:||L - Industrial Organization > L9 - Industry Studies: Transportation and Utilities > L93 - Air Transportation
D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D84 - Expectations; Speculations
C - Mathematical and Quantitative Methods > C2 - Single Equation Models; Single Variables > C23 - Models with Panel Data; Longitudinal Data; Spatial Time Series
D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D83 - Search; Learning; Information and Knowledge; Communication; Belief
|Depositing User:||Diego Escobari|
|Date Deposited:||02. May 2012 10:41|
|Last Modified:||14. Feb 2013 08:25|
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