The effects of different network structure on airlines competition

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Science Research Management ›› 2014, Vol. 35 ›› Issue (10) : 57-68.

Li Shiping

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Abstract

Under the framework of passengers' outside options, multi-market and duopoly competition, we study the effects of different combinations of network structure on airline competition performance by constructing the decision model for selecting airline network structure. The result shows that it is not a simple liner relationship between the competitive performance of airlines and these elements such as the degree of products differences, the external choice cost and the marginal cost, but is related to network structure. Different combinations of network structure of competitive equilibrium correspond to different levels of performance. These conclusions provide theoretical guidance for airlines selectively using different network structures to improve their performances in a dynamic competition based on the different network structures of competitors.

Key words

fully-connected networks / hub-and-spoke networks / outside option / brand loyalty / equilibrium decision

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Li Shiping. The effects of different network structure on airlines competition[J]. Science Research Management. 2014, 35(10): 57-68

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