Abstract
This study investigates airport pricing policy (uniform or discriminatory pricing) for international and domestic flights. We assume a game in which two countries exist, where each country has a complementary international hub airport and several local airports. In the symmetric setting, we find that uniform pricing (discriminatory pricing) is a unique Nash equilibrium for a small (large) number of local airports and that for an intermediate number of local airports, equilibria emerge when a hub airport adopts uniform pricing (discriminatory pricing) and the other hub airport adopts discriminatory pricing (uniform pricing). Additionally, we show that uniform pricing is socially preferable for both countries.
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