Internet penetration and airline pricing: Evidence from China

Huang, Zhibin and Yong, Jianming and Ma, Wenliang and Chen, Mengying and Xiong, Zihan and Shrestha, Anup ORCID: https://orcid.org/0000-0002-2952-0072 (2022) Internet penetration and airline pricing: Evidence from China. Transport Policy, 123. pp. 104-111. ISSN 0967-070X


Abstract

This paper investigates the impacts of increasing Internet penetration on airfares and price dispersion in the Chinese airline market. It is found that an increase in Internet penetration is associated with higher average airfares and lower price dispersion between the major Chinese carriers. It appears that the increase in Internet penetration seems to have strengthened the major airlines’ ability to maintain price stability, which is an indication of the existence mutual forbearance among the major carriers confirmed in other studies. Higher prices and lower price dispersion are mostly to occur in the most heavily markets. This research also finds that if carriers possess similar degree of market power, the price dispersion between the airline pair is smaller. The findings can generate important policy insights, and inform anti-trust policies in the post-Covid period, when more consumers use Internet for search and inquiries, and when big data and artificial intelligence technologies mature.


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Item Type: Article (Commonwealth Reporting Category C)
Refereed: Yes
Item Status: Live Archive
Additional Information: Files associated with this item cannot be displayed due to copyright restrictions.
Faculty/School / Institute/Centre: Current - Faculty of Business, Education, Law and Arts - School of Business (18 Jan 2021 -)
Faculty/School / Institute/Centre: Current - Faculty of Business, Education, Law and Arts - School of Business (18 Jan 2021 -)
Date Deposited: 22 May 2022 22:44
Last Modified: 24 Oct 2022 02:22
Uncontrolled Keywords: Price dispersion; Internet penetration; China; Market power; Collusion
Fields of Research (2020): 46 INFORMATION AND COMPUTING SCIENCES > 4609 Information systems > 460903 Information modelling, management and ontologies
35 COMMERCE, MANAGEMENT, TOURISM AND SERVICES > 3509 Transportation, logistics and supply chains > 350901 Air transportation and freight services
Socio-Economic Objectives (2020): 22 INFORMATION AND COMMUNICATION SERVICES > 2204 Information systems, technologies and services > 220408 Information systems
Identification Number or DOI: https://doi.org/10.1016/j.tranpol.2022.04.017
URI: http://eprints.usq.edu.au/id/eprint/48521

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