Discussion: Can Collusion Be Better Than a Merger?
The American Airlines and US Airways Merger
A section in Chapter 8 of Introduction to Industrial Organization discusses multimarket contact in the airline industry. Consider the two airlines in your final project case study. What opportunities did these airlines have to collude through multimarket contact before the merger? Base your argument on multimarket contact data in the case study briefing for the final project.
In response to your classmates' posts, make an argument for whether or not the merger will represent a significant change. Support your argument with an estimate of the post-merger opportunity to collude through multimarket contact with other airlines.