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Competition and Firm Service Reliability Decisions: A Study of the Airline Industry.
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- Author(s): Zhou, Chen; Albuquerque, Paulo; Grewal, Rajdeep
- Source:
Journal of Marketing Research (JMR); Apr2021, Vol. 58 Issue 2, p377-399, 23p, 6 Charts, 2 Graphs- Subject Terms:
- Source:
- Additional Information
- Abstract: To understand the impact of competition on organizational service reliability decisions, this study investigates whether firms in the airline industry consider competitors' actions when making their service reliability decisions. Using data from the U.S. Bureau of Transportation Statistics on flight cancellation rates and average length of flight delays, the authors use two complementary approaches, a simultaneous equation model and a discrete game framework, to examine competitive influence on firm decisions on the level of service reliability. The authors find that competitive effects are asymmetric and differ by the type of firm and its competitors—full-service versus low-cost airlines—as well by level of market concentration. The authors show that internal initiatives, such as on-time bonuses, can substantially improve service reliability but require the firm to account for competitive reactions. Ignoring competitive effects leads to an overestimation of the impact of these programs on service reliability levels. [ABSTRACT FROM AUTHOR]
- Abstract: Copyright of Journal of Marketing Research (JMR) is the property of American Marketing Association and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)
- Abstract:
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