Collect a set of price quotes for no fewer than 30 airplane tickets. Examine how these price

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Collect a set of price quotes for no fewer than 30 airplane tickets. Examine how these price quotes change as you vary the tickets—one characteristic at a time. For instance, suppose you get a price quote for a ticket on United Airlines from Raleigh-Durham to Chicago, departing on May 17 and returning on May 19. Change the following characteristics, one at a time, and get a new price quote:

  • Change the time of departure within the same day.
  • Change the source of your quote (e.g., from Travelocity to the airline’s website).
  • Change the predeparture interval date (e.g., compare flights bought a couple of days in advance to months in advance).
  • Change the class of the ticket and travel restrictions.
  • Change the return date to include a Saturday stay-over.
  • Change anything else you can think of.

Make sure you get price quotes from airports where one airline has a dominant presence (e.g., Delta in Seattle) and a route presenting stiff competition from a “discount” carrier such as Frontier or JetBlue.

Describe some of the important differences in pricing you observe. Are the pricing differences consistent with the patterns of indirect or direct price discrimination, or are there other explanations? Original, novel, and thoughtful interpretations of the patterns you see in the data are particularly welcome.

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Managerial Economics

ISBN: 9781337106665

5th Edition

Authors: Luke M. Froeb, Brian T. McCann, Michael R. Ward

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