Escobari, Diego (2011): Dynamic Pricing, Advance Sales, and Aggregate Demand Learning in Airlines. Forthcoming in: Journal of Industrial Economics

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Abstract
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 
Language:  English 
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  Panel Data Models ; Spatiotemporal Models D  Microeconomics > D8  Information, Knowledge, and Uncertainty > D83  Search ; Learning ; Information and Knowledge ; Communication ; Belief ; Unawareness 
Item ID:  38509 
Depositing User:  Diego Escobari 
Date Deposited:  02 May 2012 10:41 
Last Modified:  27 Sep 2019 12:50 
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URI:  https://mpra.ub.unimuenchen.de/id/eprint/38509 