Airline industry , merger , entry-inducing effects
Abstract:
Theoretical research has investigated the relevance of entry-inducing effects as countervailing
factor to a merger-related increase in market power. We use route-level data for the America
West Airlines – US Airways merger (2005) to investigate whether such an effect can be
identified empirically. Our results show that both entry-inducing and entry-dissuading effects
can be observed depending on the type of affected route and the carrier under investigation.
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