January 2018
Intermediate to advanced
374 pages
13h 36m
English
book
Competition versus Predation in Aviation Markets
by Peter Forsyth, David W. Gillen, Otto G. Mayer, Hans-Martin Niemeier
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Chapter 15A Capacity Lock-In Rule
David Starkie
Introduction
The object of this chapter is to revisit and argue the merits of a proposed rule, referred to as the Capacity Lock-in Rule (CLR), for deterring predatory behaviour in the airline industry. The Rule itself limits conduct in an ex-ante context by focusing on the response of incumbents after entrants have withdrawn from the market.
The next section summarizes the events leading up to the formulation of the proposal and this is followed by a summary of its salient characteristics. There was a lengthy exchange of correspondence between Professor Alfred Kahn and myself about the proposal and because this exchange clarified a number of issues and tested the arguments, it is also included. ...
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