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Federal Reserve Bank of Atlanta
FRB Atlanta Working Paper
Common Ownership Does Not Have Anti-Competitive Effects in the Airline Industry
Institutional investors often own significant equity in firms that compete in the same product market. These "common owners" may have an incentive to coordinate the actions of firms that would otherwise be competing rivals, leading to anti-competitive pricing. This paper uses data on airline ticket prices to test whether common owners induce anti-competitive pricing behavior. We find little evidence to support such a hypothesis, and show that the positive relationship between average ticket prices and a commonly used measure of common ownership previously documented in the literature is generated by the endogenous market share component, rather than the ownership component, of the measure.
Cite this item
Patrick Dennis & Kristopher S. Gerardi & Carola Schenone, Common Ownership Does Not Have Anti-Competitive Effects in the Airline Industry, Federal Reserve Bank of Atlanta, FRB Atlanta Working Paper 2019-15, 01 Jul 2019.
- G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
- G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
- G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
- L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
Keywords: common ownership; airline prices; institutional ownership; competition
This item with handle RePEc:fip:fedawp:2019-15
is also listed on EconPapers
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