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On the interaction between high-quality products and low-quality products in air transportation: a review

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Author(s): Rafael Fraga

Journal: Journal of Transport Literature
ISSN 2238-1031

Volume: 2;
Issue: 2;
Start page: 66;
Date: 2008;
Original page

Keywords: demand | quality | multiproduct | entry | air transportation

ABSTRACT
This paper is basicaly the review of a recent study published by Abraham Dunn (University of Austin, Texas - USA). This study, called "Do low-quality products affect high-quality entry? Multiproduct firms and nonstop entry in airline markets", was presented in a workshop held by the Antitrust Division of the Department of Justice North American (Antitrust Division of the U.S. Department of Justice - DOJ): an event aiming presentations of researches about competition in air transport market. Dunn examined empirically the decision of an airline's change to offer services direct (nonstop) between a pair of cities that may already being served by an indirect connection. Regarding to the offer of two different products with different levels of quality, direct flights (higher quality) and indirect flights (lower quality), the study examines how the existence of low quality products affects the enter of high-quality products at the transportation market.
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