Online and Offline Demand and Price Elasticities: Evidence from the Air Travel Industry

Published Online:https://doi.org/10.1287/isre.1100.0312

References

  • Alba J. W., Lynch J., Weitz B., Janiszewski C., Lutz R., Sawyer A., Wood S. Interactive home shopping: Consumer, retailer, and manufacturer incentives to participate in electronic marketplaces. J. Marketing (1997) 61(3):38–53CrossrefGoogle Scholar
  • Akerlof G. A. The market for lemons: Quality uncertainty and the market mechanism. Quart. J. Econom. (1970) 84(3):488–500CrossrefGoogle Scholar
  • Anderson N. H., Abelson R. P., Aronson E., McGuire W. J., Newcomb T. M., Rosenberg M. J., Tannenbaum P. H. A simple model for information integration. Theories of Cognitive Consistency: A Sourcebook (1968) (Rand McNally, Chicago) 731–758Google Scholar
  • Anderson N. H. Integration theory and attitude change. Psych. Rev. (1971) 78:171–206CrossrefGoogle Scholar
  • Bailey J. P. Intermediation and electronic markets: Aggregation and pricing in Internet commerce. (1998) . Unpublished doctral dissertation, Technology, Management, and Policy, MIT, Cambridge, MAGoogle Scholar
  • Bakos J. Y. Reducing buyer search costs: Implications for electronic marketplaces. Management Sci. (1997) 43(12):1676–1692LinkGoogle Scholar
  • Berry S., Levinsohn J., Pakes A. Automobile prices in equilibrium. Econometrica (1995) 63(4):841–890CrossrefGoogle Scholar
  • Bhadra D. Demand for travel in the United States: Bottom-up econometric estimation and implications for forecasts by origin and destination city pairs. J. Air Transportation (2003) 8(2):19–55Google Scholar
  • Bijmolt T. H. A., van Heerde H. J., Pieters R. G. M. New empirical generalizations on the determinants of price elasticity. J. Marketing Res. (2005) 42(2):141–156CrossrefGoogle Scholar
  • Borenstein S. The evolution of U.S. airline competition. J. Econom. Perspect. (1992) 6(2):45–73CrossrefGoogle Scholar
  • Breusch T., Pagan A. A simple test for heteroskedasticity and random coefficient variation. Econometrica (1979) 47(5):1287–1294CrossrefGoogle Scholar
  • Brons M., Pels E., Nijkamp P., Rietveld P. Price elasticities of demand for passenger air travel: A meta-analysis. J. Air Transport Management (2002) 8(1):165–175CrossrefGoogle Scholar
  • Brown J. R., Goolsbee A. Does the Internet make markets more competitive? Evidence from the insurance industry. J. Political Econom. (2002) 110(4):481–507CrossrefGoogle Scholar
  • Brynjolfsson E., Smith M. D. Frictionless commerce? A comparison of Internet and conventional retailers. Management Sci. (2000) 46(4):563–585LinkGoogle Scholar
  • Brynjolfsson E., Hu Y., Smith M. D. Consumer surplus in the digital economy: Estimating the value of increased customer variety at online booksellers. Management Sci. (2003) 49(11):1580–1596LinkGoogle Scholar
  • Chellappa R. K., Kumar R. Examining the role of “free” product-augmenting online services in pricing and customer retention strategies. J. Management Inform. Systems (2005) 22(1):355–377CrossrefGoogle Scholar
  • Chellappa R. K., Sin R. G., Siddarth S. Price-formats as a source of price dispersion: A study of online and offline prices in the domestic U.S. airline markets. Inform. Systems Res. (2010) . ePub ahead of print March 1, http://dx.doi.org/10.1287/isre.1090.0264Google Scholar
  • Chevalier J., Goolsbee A. Measuring prices and price competition online: Amazon.com and BarnesandNoble.com. Quant. Marketing Econom. (2003) 1(2):203–222CrossrefGoogle Scholar
  • Chircu A. M., Kauffman R. J. Reintermediation strategies in business-to-business electronic commerce. Internat. J. Electronic Commerce (2000) 4(4):7–42CrossrefGoogle Scholar
  • Clemons E. K., Hann I., Hitt L. M. Price dispersion and differentiation in online travel: An empirical investigation. Management Sci. (2002) 48(4):534–549LinkGoogle Scholar
  • comScore, Inc. Understanding consumers' shopping and buying behavior at supplier and agency travel sites. (2010) . Industry Report, Reston, VA, June 2006. Accessed April 18, 2010, www.comscorea.comGoogle Scholar
  • Degeratu A., Rangaswamy A., Wu J. Consumer choice behavior in online and traditional supermarkets: The effects of brand name, price, and other search attributes. Internat. J. Res. Marketing (2000) 17(1):55–78CrossrefGoogle Scholar
  • Dimoka A., Pavlou P. Product uncertainty in online markets: Conceptualization, antecedents, and consequences. (2010) . Working paper, SSRN. ssrn.com/abstract=1557862Google Scholar
  • Duliba K. A., Kauffman R. J., Lucas H. C. Appropriating value from computerized reservation systems ownership in the airline industry. Organ. Sci. (2001) 12(6):702–728LinkGoogle Scholar
  • Ellison G. D., Ellison S. F. Search, obfuscation, and price elasticities on the Internet. Econometrica (2009) 77(2):427–452CrossrefGoogle Scholar
  • eMarketer High flying online travel segment gets down to business. (2005) March 9(Newsletter, New York) Google Scholar
  • Ghose A., Yao Y. Using transaction prices to re-examine price dispersion in electronic markets. Inform. System Res. (2010) . ePub ahead of print February 1, http://dx.doi.org/10.1287/isre.1090.0252Google Scholar
  • Ghose A., Smith M. D., Telang R. Internet exchanges for used books: An empirical analysis of product cannibalization and welfare impact. Inform. Systems Res. (2006) 17(1):3–19LinkGoogle Scholar
  • Gimeno J. Reciprocal threats in multimarket rivalry: Staking out “spheres of influence” in the U.S. airline industry. Strategic Management J. (1999) 20(2):101–128CrossrefGoogle Scholar
  • Goldfeld S., Quandt R. Some tests for homoscedasticity. J. Amer. Statist. Association (1965) 60(310):539–547CrossrefGoogle Scholar
  • Granados N. F., Gupta A., Kauffman R. J. The impact of IT on market information and transparency: A unified theoretical framework. J. Association Inform. Systems (2006) 7(3):148–178CrossrefGoogle Scholar
  • Granados N. F., Gupta A., Kauffman R. J. Designing online selling mechanisms: Online transparency and prices. Decision Support Systems (2008) 45(4):729–745CrossrefGoogle Scholar
  • Granados N. F., Gupta A., Kauffman R. J. Information transparency in business-to-consumer markets: Concepts, framework, and research agenda. Inform. Systems Res. (2010) 21(2):207–226LinkGoogle Scholar
  • Gupta A., Su B., Walter Z. Risk profile and consumer shopping behavior in electronic and traditional channels. Decision Support Systems (2004a) 38(3):347–367CrossrefGoogle Scholar
  • Gupta A., Su B., Walter Z. An empirical study of consumer switching from traditional to electronic channel: A purchase decision process perspective. Internat. J. Electronic Commerce (2004b) 8(3):131–161CrossrefGoogle Scholar
  • Johnson R. D., Levin I. P. More than meets the eye: The effect of missing information on purchase evaluations. J. Consumer Res. (1985) 12(3):169–177CrossrefGoogle Scholar
  • Johnson E. J., Moe W. W., Fader P. S., Bellman S., Lohse G. L. On the depth and dynamics of online search behavior. Management Sci. (2004) 50(3):299–308LinkGoogle Scholar
  • Kennedy P.A Guide to Econometrics (1998) 4th ed.(MIT Press, Cambridge, MA) 205–217Google Scholar
  • Lal R., Sarvary M. When and how is the Internet likely to decrease price competition? Marketing Sci. (1999) 18(4):485–503LinkGoogle Scholar
  • Lee H. G. Do electronic marketplaces lower the price of goods? Comm. ACM (1998) 41(12):73–80CrossrefGoogle Scholar
  • Lynch A., Ariely D. Wine online: Search costs affect competition on price, quality, and distribution. Marketing Sci. (2000) 19(1):83–103LinkGoogle Scholar
  • Miller D., Chen M. J. Sources and consequences of competitive inertia: A study of the U.S. airline industry. Admin. Sci. Quart. (1994) 39(1):1–23CrossrefGoogle Scholar
  • Oh W., Lucas H. C. Information technology and pricing decisions: Price adjustments in online computer markets. MIS Quart. (2006) 30(3):755–775CrossrefGoogle Scholar
  • Oum T. H., Zhang A., Zhang Y. Inter-firm rivalry and firm-specific price elasticities in deregulated airline markets. Internat. J. Transport Econom. Policy (1993) 27(2):171–192Google Scholar
  • PhoCusWright Number of U.S. online travel buyers up 17% in 2003. (2004) . Press release, Sherman, CT (March 2). Accessed April 18, 2010, www.phocuswright.comGoogle Scholar
  • Regan K. Study: Economic slowdown aids online travel. E-Commerce Times (2001) April 23). Accessed April 18, 2010, www.ecommercetimes.com/perl/story/9156.htmlGoogle Scholar
  • Smith M. D. The impact of shopbots on electronic markets. Marketing Sci. (2002) 30(4):446–454CrossrefGoogle Scholar
  • Smith M. D., Bailey J., Brynjolfsson E. Understanding digital markets: Review and assessment. (2001) . Working Paper 4211-01, Sloan School of Management, MIT, Cambridge, MAGoogle Scholar
  • Stigler G. The economics of information. J. Political Econom. (1961) 69(3):213–225CrossrefGoogle Scholar
  • Stigler G. A theory of oligopoly. J. Political Econom. (1964) 72(1):213–225CrossrefGoogle Scholar
  • Talluri K. T., van Ryzin G. J.The Theory and Practice of Revenue Management (2004) (Springer Science and Business Media, New York) CrossrefGoogle Scholar
  • Villas-Boas J. M., Winer R. S. Endogeneity in brand choice models. Management Sci. (1999) 45(10):1324–1338LinkGoogle Scholar
  • Walter Z., Gupta A., Su B. The sources of on-line price dispersion across product types: An integrative view of on-line search costs and price premiums. Internat. J. Electronic Commerce (2006) 11(1):37–62CrossrefGoogle Scholar
  • Zettelmeyer F. Expanding to the Internet: Pricing and communications strategies when firms compete on multiple channels. J. Marketing Res. (2000) 37(3):292–308CrossrefGoogle Scholar
  • Zettelmeyer F., Scott Morton F., Silva-Risso J. How the Internet lowers prices: Evidence from matched survey and automobile transaction data. J. Marketing Res. (2006) 43(2):168–181CrossrefGoogle Scholar
INFORMS site uses cookies to store information on your computer. Some are essential to make our site work; Others help us improve the user experience. By using this site, you consent to the placement of these cookies. Please read our Privacy Statement to learn more.