Learning and Exit Behavior of New Entrant Discount Airlines From CIty - Pair Markets  

Oleh:

Dixit, Ashutosh ; Chintagunta, Pradeep K.

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: Journal of Marketing (EBSCO) vol. 71 no. 2 (Apr. 2007), page 150-168.
Topik: AIRLINES; learning; behaviour; discount airlines; city - pair markets

Ketersediaan

Perpustakaan Pusat (Semanggi) Nomor Panggil: JJ94.11 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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Isi artikel

In this research, the authors investigate firms' exit behaviours. On the basis of extant literrature in economics, strategy and marketing, the authors identity market and firm specific factors that influenc eexit behaviour. They account for firm's uncertainty about a market's true attractiveness after entry on the probability of exiting a market. To evaluate exit decisions, they propose a bayesian belief - updating model of learning embedded in a logit model that incorporates market - and firm - specific factors. The estimated evolution of beliefs over time enables the authors to determine whether firms use market information to update their prior beliefs about market attractiveness. The authors empirically investifate the market exits of new entrant discount airlines from city - pair markets. The results suggest that a combination of several market and firm factors influences exit behaviour. Airlines' prior beliefs about market attractiveness are not necessarily consistent with the market's intrinsic attractiveness and firms learn about the true market attractiveness over time. The authors also provide model comparisons with extant approached to studying market exit and find that the proposed approach provides a better fit and predictive ability.

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