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   Product Unbundling in the Travel Industry: The Economics of Airline Bag Fees; ; Picard, Pierre M  et alin Journal of Economics and Management Strategy (2015), 24(3), 457-484 This paper provides theory and evidence on airline bag fees, offering insights into a real-world case of product unbundling. The theory predicts that an airline’s fares should fall when it introduces a ... [more ▼] This paper provides theory and evidence on airline bag fees, offering insights into a real-world case of product unbundling. The theory predicts that an airline’s fares should fall when it introduces a bag fee, but that the full-trip price (the bag fee plus the new fare) could either rise or fall. The empirical evidence presented in the paper provides strong confirmation of the first prediction. The data also suggest that the average fare falls by less than the bag fee itself so that the full price of a trip rises for passengers who choose to check bags. [less ▲] Detailed reference viewed: 124 (9 UL)Where and When to Invest in Infrastructure; Picard, Pierre M in Regional Science and Urban Economics (2014) This paper analyzes an irreversible “where-and-when” investment decision, in which a government must decide not only when to invest in income-increasing infrastructure but also where to make the ... [more ▼] This paper analyzes an irreversible “where-and-when” investment decision, in which a government must decide not only when to invest in income-increasing infrastructure but also where to make the investment, doing so under imperfect observability of the investment gains. The two models considered in the paper differ in the source of the imperfection. In the signal model, the imperfection comes from imperfect observability of initial income gains from the investment, while in the option model, it comes from the stochastic nature of the income gains in the second period. In addition to providing the first treatment of this type of problem, the analysis shows that the influences of underlying parameters on whether or not the government waits to invest are similar in the two models. [less ▲] Detailed reference viewed: 205 (16 UL)Product Unbundling in the Travel Industry: The Economics of Airline Bag Fees; ; Picard, Pierre M et alE-print/Working paper (2013) This paper provides theory and evidence on airline bag fees, offering insights into a real-world case of product unbundling. The theory predicts that an airline’s fares should fall when it introduces a ... [more ▼] This paper provides theory and evidence on airline bag fees, offering insights into a real-world case of product unbundling. The theory predicts that an airline’s fares should fall when it introduces a bag fee, but that the full trip price (the bag fee plus the new fare) could either rise or fall. The empirical evidence presented in the paper provides strong confirmation of this prediction. The data also suggest that the average fare falls by less than the bag fee itself, so that the full price of a trip rises for passengers who choose to check bags. [less ▲] Detailed reference viewed: 114 (15 UL) |
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