Marco Alderighi

University of Aosta Valley | Université de la Vallée d'Aoste · SEP

The extensive use of online travel agencies by hotels and their guests has amplified the number of consumers who directly experiment, appraise, and evaluate how dynamic pricing is implemented by hotels. Using data retrieved from an online travel agency, we trace how room rates change according to booking day, week of stay, and room type; and we bui...

We study the entry and exit strategy of low-cost carriers into the Italian aviation market during the early stage of their expansion. We find that their strategy is mainly driven by population size, GDP per capita, tourism vocation of the area, and degree of competition, although the direction and magnitude of these factors change over time. At the...

When a firm can sell multiple units before any price adjustment takes place, three forces may affect the pricing of the inventory over time: perishability drives prices down, scarcity shifts prices up, and intertemporal price discrimination raises prices. Hidden prices arise because each unit, even if not immediately up for sale, is assigned a pric...

We study how snob consumption externalities (SCEs) affect the adoption of a new technology in a vertically differentiated duopoly. We show that the leader firm does not adopt when SCEs are medium or high. From a social viewpoint, medium SCEs lead to excessive inertia (the leader firm should adopt, but it does not), and high SCEs lead to reverse ado...

This paper presents a model of second-degree price discrimination and intergroup effects. Consumer heterogeneity is assumed on both a horizontal and a vertical dimension, while various distinct market structures, some of which include low-cost carriers (LCCs), are considered. We theoretically show that the rivalry among full-service carriers (FSCs)...

We establish a link between the best system of government and the strength of interstate spillovers within a model of political competition with self-interested parties. We show the superiority of the unitary system when: interstate spillovers are strong; the ego rents of local parties are high; and the system of government is chosen under a veil o...

We review the importance of the revenue management (RM) system in the airline industry, focusing on cost-leader companies. We show that RM of low-cost carriers, which looks simple at a first glance, is indeed quite a sophisticated tool for extracting value from different demand segments, and thus, it is, for all intents and purposes, a capability i...

If flight fares cannot be continuously and instantaneously updated, then there exist 'static pricing' spells that the airlines manage by defining a fare for the entire flight's capacity, i.e., a fare distribution. Evidence indicates static spells' duration depends on a flight's load factor, its selling rate and the time to departure. Overall, no su...

Recent literature shows that in the US gasoline prices are higher in locations using more odd prices (particularly those ending in five and nine digits), since they coarse the pricing grid and act as a focal collusive point. We replicate this analysis for the Italian market, obtaining the opposite result. Since the rightmost digit of the retail gas...

This paper offers an empirical investigation of the relationship between air transport service and trade, using a panel of 20 Italian regions and 24 European countries observed, half-yearly, over the period 1998–2010. We apply a Newey-West two-step GMM estimator to produce estimates which are robust to the presence of heteroskedasticity and autocor...

This paper studies how local food specialities can affect the attractiveness of tourist destinations, distinguishing between market-expanding and business-stealing effects. We surveyed 1100 Italians in their home about their intention to visit or revisit three popular mountain resorts in Northern Italy (Valtellina, Valle d’Aosta, Trentino), and abo...

We analyse the fare setting strategy of a leading European low-cost carrier, Ryanair, which, until recently, adopted an unsegmented pricing policy (all tickets belong to a single fare class). We show that, to account for different demand characteristics, the company adjusts the two main components governing the dynamics of posted fares, namely time...

This paper studies how gas stations adjust their gasoline and diesel prices in response to their neighboring competitors. The empirical analysis relies on data collected from January to August 2011 on the daily prices of 20 gas stations located in Cuneo, Italy. These data show significant price uniformity, especially within the same geographical ar...

This paper analyses the optimal investment policy in domestic and international infrastructure through a model of competition among countries. The framework provided by Martin and Rogers [Martin, P. and Rogers, C., 1995, Industrial location and public infrastructure, Journal of International Economics, 39, 335-51.] is here extended to include dynam...

Géographie et transports publics locaux Cet article examine comment la géographie influe sur la performance des entreprises locales de transports publics en Italie. En utilisant des données sur 110 entreprises impliquées dans le transport urbain et interurbain, nous fournissons différentes estimations des frontières de coût stochastiques. Il en res...

We analyze two different cases of entry regulation in professional markets: first, when licensing is a requirement for becoming a professional (lawyers); second, when entry and price restrictions are applied on a geographical basis (pharmacists). Both cases are investigated within a circular model of localized competition and heterogeneous players....

This paper investigates the price-setting behavior of full-service airlines in the European passenger aviation market. We develop a model of airline competition, which accommodates various market structures, some of which include low-cost players. Using data on published airfares of Lufthansa, British Airways, Alitalia and KLM for the main city-pai...

Based on two strands of theoretical research, this paper provides new evidence on how fares are jointly affected by in-flight seat availability and purchasing date. As capacity-driven theories predict, it emerges that fares monotonically and substantially increase with the flights occupancy rate. Moreover, as suggested in the literature on intertem...

This paper investigates the link between firms' geographic configuration and market power in imperfect markets. We consider two related setups. The first illustrates the relevant characteristics of the pricing equilibrium. A main implication is that the equilibrium price vector changes in accordance with the firms' spatial configuration. The second...

This paper analyzes the link between cultivation of taste and tourist satisfaction during vacations. A simple model shows that, when cultural capital accumulation matters, customers are ready to sacrifice some of their current utility in order to get higher returns in future, and therefore, the relation between satisfaction and the demand for cultu...

Questo lavoro analizza il ruolo esercitato dal trasporto aereo passeggeri nel favorire la capacità esportativa del manifatturiero italiano ruotando attorno a due interrogativi principali. In primo luogo, vuole verificare se la presenza di servizi di trasporto aereo passeggeri abbia o meno un impatto positivo sulle esportazioni; in secondo luogo vuo...

We collect data on published fares for the route London-Amsterdam to shed some light on the pricing practices of low-cost and legacy carriers, when operating in a large and crowded market. We investigate the reach of two strategies of segmentation involving the time before departure the ticket has been bought (inter-temporal segmentation) and the d...

This paper presents a model of second-degree price discrimination and inter-group effects to describe the full-service pricing behavior in the passenger aviation market. Consumer heterogeneity is assumed on both a horizontal and a vertical dimension, while various distinct market structures, some of which include low-cost carriers (LCCs), are consi...

Using unique data on a low-cost airline posted prices and seat availability, this study sheds some light on whether the airline's actual practice of yield management techniques con- forms with some predictions from economic models of peak-load pricing under demand uncertainty. On the one hand, robust support is found to the notion that prices incre...

This paper investigates the properties of two types of cost restrictions that guarantee the existence of an equilibrium in pure strategies in Bayesian spatial competition models with heterogeneous firms.

In this paper we simulate carriers' capacity allocation practices in order to investigate the role of fences and forecasting for maintaining high load factor levels and returns in oligopolistic airline markets. We analyse the case where firms apply a well-established revenue management heuristic, called the expected marginal seat revenue rule, exte...

There are substantial fare dispersions in the airline industry. There are various theoretical explanations of this, but they only provide a qualitative justification of the phenomenon. This paper simulates the quantitative outcome of three popular models to evaluate their ability to generate substantial fare dispersions. We find that, in duopoly, t...

This paper provides a survey on studies that analyze the macroeconomic effects of intellectual property rights (IPR). The first part of this paper introduces different patent policy instruments and reviews their effects on R&D and economic growth. This part also discusses the distortionary effects and distributional consequences of IPR protection a...

The concept of spatial interaction is certainly one of the most important research topics in the regional science field. As stated by Olsson (1970; p.223 reported by Fotheringham and O’Kelly 1989): The concept of spatial interaction is central for everyone concerned with theoretical geographical and regional science … Under the umbrella of spatial...

In the mid-1980s there was much debate on the impact of information and communication technologies (ICTs) on productivity. The famous words of Robert Solow (1987) summarized the view of most skeptics: “You can see the computer age everywhere but in the productivity statistics.” In other words, according to Solow, there was no empirical evidence fro...

This paper provides a simple model of pricing (and capacity choice) for highly per-ishable goods, assuming that installing capacity is costly and high-valuation consumers arrive late. We show that oligopolistic …rms …nd it optimal to engage in intertemporal price discrimination even if there is no uncertainty concerning the arrivals and there is no...

We study when a monopolistically-competitive firm may optimally choose to limit the size of its market. This may be the case when the cost of serving the market with geographically dispersed customers is increasing in size. We also investigate the incentives faced by a firm to limit the reach of its market when it adopts two different pricing schem...

This paper compares alternative licensing schemes of a patentor, that is, at the same time, a producer within an industry. The licensing scheme can assume the form of a royalty per unit of output, a fixed fee, or a fixed fee with maximum authorized production. We show that, when the innovation is non-drastic, in a duopolistic Cournot competition, t...

The paper extends the Salop model of localized competition by allowing firms to have heterogeneous costs. We provide a general but highly tractable analytical solution for the equilibrium prices, and we study the long-run properties of the model using two different entry games. We show that cost heterogeneity affects the efficiency of the market eq...

This paper aims to provide new measures of airline network configuration with a view to analyse effectively the complexity of modern carriers' network design. It studies network configurations in the airline sector by taking into account both spatial and temporal dimensions. The spatial dimension is measured by using both the Gini index and the Fre...

We characterise, for both separate and interdependent markets, the local pure-strategies Nash equilibrium of a spatial duopoly game, where consumers are horizontally and vertically heterogeneous, and firms have different cost structures and ranges of product lines. We show that standard results which emerged in the monopoly context can not be gener...

We model the electricity market in Italy, focusing on the impact of buying consortia among SMEs on the behaviour of the large electricity producers and sellers. We show that consortia may in certain circumstances produce a pro-competitive result, i.e. they may induce a reduction of prices not only for consortia members but also for firms not in the...

We analyze a variant of the standard Dixit-Stiglitz (AER, 1977) model, adding transport costs and assuming that, in addition to price, a firm can choose the size of the market area and the quality of the product. We also modify the standard cost function, making variable costs and fixed costs increasing in both "reach" and quality. We characterize...

The paper identifies conditions under which asymmetric equilibria may exist when carriers compete in designing their network configurations in a game-theoretical framework. Two carriers are assumed here, which are allowed to play three different strategies: point-to-point (PP), hub-and-spoke (HS) or multi-hub. We find two main stable outcomes, whic...

Airlines network choices are analysed to describe the co-existence of alternative business models: the full service model based on the hub-and-spoke (HS) system and the low cost model based on point-to-point (PP) system. The analysis is carried on both theoretically and empirically. In the theoretical part, we show that the rise of the low costs bu...

This paper investigates the response of full service carriers (FSCs) to the entry of low-cost carriers (LCCs). We develop a model of airline competition, which accommodates various market structures, some of which include low-cost players. Using data on published airfares of Lufthansa, British Airways, Alitalia and KLM for the main city-pairs from...

The paper analyses the reorganisation that European carriers have implemented after September 11 in the transatlantic flights. We model carriers’ conduct as a mixture of short- and long-term goals, where the weights depend on firm-specific variables (adjustment costs, financial situation) and subjective expectations on the crisis duration. Data pro...

In this paper we examine the impact of membership in Preferential Trade Agreements (PTAs) on trade between PTA members. Rather than considering the impact of PTA membership on the volume of trade we consider the impact of membership on the structure of trade. For a large sample of countries over the period 1962-2000 we find that membership in a PTA...

This paper analyses the relationship between the service contract (and tender) design and the outcome of the tender in the local public tran sport. Data are collected through a survey involving about 50 territorial entities. It emerges that optimal contract (and tender) design crucially depends on the objective function of the regulator. Participat...

This paper investigates how geography affects the performance of local public transport firms in Italy. Using data on 110 firms involved in urban and intercity transport in 2002, we provide different estimates of stochastic cost frontiers. The analysis is then performed for two different models: a long-run cost function and a short-run variable cos...

This paper analyses the reorganisation that European carriers have implemented after September 11th in the transatlanticflights. We model carriers' conduct as a mixture of short- and long-term goals where the weights depend on firm-specific variables (adjustment costs, financial sit- uation) and subjective expectations on the crisis duration. Data...

We analyse two team coordination procedures, usually referred to as 'management by exception' that allow a …rm to exploit most of the coordination advantages in team decision making, while simultaneously limit the costs borne from information acquisition and processing. The results of the model are also discussed in relation to the recent developme...

The aim of this research is to provide some insights on the process of passenger rail transport liberalization when services are differentiated. In particular, the paper will focus on the impact of new entry in the high-speed services (HS) segment when the traditional service is characterised by service obligations for the incumbent. On the one han...

A general result of information theory is that asymmetric information generates agent rents and distortions in production. In this paper, we analyse the impact of asymmetric information on adoption and use of information technology (IT). Depending on the conctracting scheme, different results may occur. We explore the differences between the case o...

We analyze two different cases of entry regulation in liberal professions: first, when licensing is a requirement for becoming a professional (lawyers, doctors); second, when entry and price restrictions are applied on a geographical basis (pharmacists). Both cases are investigated with a circular model of localized competition and heterogeneous pl...