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Price Discrimination in the Online Airline Market: An Empirical Study

1
Department of Economics, University of Bologna, Piazza Scaravilli 2, 40126 Bologna, Italy
2
Italian Competition Authority, Piazza Verdi 6/a, 00198 Rome, Italy
3
Department of Engineering, Uninettuno University, Corso Vittorio Emanuele II 139, 00186 Rome, Italy
*
Author to whom correspondence should be addressed.
The views and findings expressed in this article are those of the authors and do not represent the opinion or policy of their institutions. Examples of analysis performed within this article are only examples. Assumptions made within the analysis and the results are not reflective of the position of the Italian Competition Authority.
Academic Editor: Carlos Orús
J. Theor. Appl. Electron. Commer. Res. 2021, 16(6), 2282-2303; https://doi.org/10.3390/jtaer16060126
Received: 19 July 2021 / Revised: 25 August 2021 / Accepted: 2 September 2021 / Published: 9 September 2021
(This article belongs to the Section e-Commerce Analytics)
Big Data technologies have significantly increased the possibility for sellers to adopt personalisation strategies, especially in digital markets. Among such strategies, price discrimination, a practice where the same commodity is sold at different prices, either to the same customer or to different customers, stands out. Particularly, the online airline ticket market has risen the attention of economists in recent studies, both because of its specificity and of the high data availability. This manuscript enters the debate and analyses the airline ticket market in an original way. Indeed, the aim of this work is to empirically understand whether some airline companies discriminate in prices by using the customers’ data that they collect from their websites, and, if so, which is the impact on social welfare. For performing this assessment, a software that is able to automatically collect pricing data is developed and freely released. By executing the software in two time periods, tickets prices of three airlines, three itineraries, and four different user profiles are acquired. A double analysis is performed to check if customers’ information are used to discriminate (intra-user), and if different prices are offered to distinct user profiles (inter-user). Moreover, the analyses consider control data collected from the API of the Global Distribution System Amadeus, the main flight booking platform dedicated to travel agents. Upon inspection, no evidence is found in this study to support the hypothesis that airlines use price discrimination techniques. View Full-Text
Keywords: price discrimination; digital markets; airlines; pricing; personalisation price discrimination; digital markets; airlines; pricing; personalisation
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MDPI and ACS Style

Azzolina, S.; Razza, M.; Sartiano, K.; Weitschek, E. Price Discrimination in the Online Airline Market: An Empirical Study. J. Theor. Appl. Electron. Commer. Res. 2021, 16, 2282-2303. https://doi.org/10.3390/jtaer16060126

AMA Style

Azzolina S, Razza M, Sartiano K, Weitschek E. Price Discrimination in the Online Airline Market: An Empirical Study. Journal of Theoretical and Applied Electronic Commerce Research. 2021; 16(6):2282-2303. https://doi.org/10.3390/jtaer16060126

Chicago/Turabian Style

Azzolina, Stefano, Manuel Razza, Kevin Sartiano, and Emanuel Weitschek. 2021. "Price Discrimination in the Online Airline Market: An Empirical Study" Journal of Theoretical and Applied Electronic Commerce Research 16, no. 6: 2282-2303. https://doi.org/10.3390/jtaer16060126

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