Revista de Economia Contemporânea
Print version ISSN 1415-9848
NASCIMENTO, Ana Carolina Campana; VIEIRA, Wilson da Cruz and BRAGA, Marcelo José. Determinants of price wars and collusion in Brazilian air transportation. Rev. econ. contemp. [online]. 2011, vol.15, n.3, pp.441-460. ISSN 1415-9848. http://dx.doi.org/10.1590/S1415-98482011000300003.
This paper aims to identify possible patterns of price wars and the formation of collusion by the airlines that operate in the route Rio de Janeiro - São Paulo (TAM and GOL) and estimate the conditions that facilitated the two phenomena in the period 2002 - 2010. To this end, we used game theory, economic theory of cartels and logit models as analytical tools. The results show that the determinants of these two phenomena are different for each airline: TAM had a higher probability of collusion formation than GOL in the analyzed period, while the latter was more likely to enter a price war than in collusion. Furthermore, the variables used in this study could not explain the probability of TAM practice price war.
Keywords : airlines; game theory; cartel; logit model; Brazil.