Price competition within and between airlines and high-speed trains: the case of the Milan–Rome route

Abrate, Graziano ^[1] ; Viglia, Giampaolo ^[2] ; Sanchez García, Javier ^[3] ; Forgas-Coll, Santiago ^[4]
1. [1] University of Eastern Piedmont Amadeo Avogadro
  
  University of Eastern Piedmont Amadeo Avogadro
  
  Vercelli, Italia
2. [2] Bournemouth University
  
  Bournemouth University
  
  Reino Unido
3. [3] Universitat Jaume I
  
  Universitat Jaume I
  
  Castellón, España
4. [4] Universitat de Barcelona
  
  Universitat de Barcelona
  
  Barcelona, España
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Localización: Tourism economics: the business and finance of tourism and recreation, ISSN 1354-8166, Vol. 22, Nº. 2, 2016, págs. 311-323
Idioma: inglés
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Resumen
- In the travel industry high-speed trains and airlines are increasingly competing for passengers, and the diffusion of price optimization based on real time demand fluctuations poses new challenges in the analysis of price competition between operators. This paper presents an analysis of how different competitors simultaneously adjust their prices in the short run. The empirical model accounts for dynamic price variations, exploring both intramodal and intermodal price competition. The results, based on 12,506 price observations, show that intermodal competition presents some kind of asymmetric behaviour, with airlines reacting more than trains to competitors' price changes. The paper concludes with the implications of this heterogeneous behaviour for the tourism and travel industries.