Abstract
We propose conduct parameter-based market power measures within a model of price discrimination, extending work by Hazledine (Econ Lett 93:413–420, 2006) and Kutlu (Econ Lett 117:540–543, 2012) to certain forms of second-degree price discrimination. We use our model to estimate the market power of US airlines in a price discrimination environment. We find that a slightly modified version of our original theoretical measure is positively related to market concentration. Moreover, on average, market power for high-end segment is greater than that of low-end segment.
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