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Competitive Pricing Strategies of Low Cost Airlines in the Perspective of Game theory

Price is the weapon of choice for many low cost airlines in the competition for market share. Regional low cost airlines' pricing strategy for market stimulation is issuing free tickets and competing in ticket prices setting. It has been assumed as an effective strategy in influencing customers...

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Main Authors: Poh, Lim Seng, Mohd Ghazali Mohayidin,
Format: Article
Published: 2011
Online Access:http://library.oum.edu.my/repository/894/
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spelling my.oum.8942013-09-06T03:15:08Z Competitive Pricing Strategies of Low Cost Airlines in the Perspective of Game theory Poh, Lim Seng Mohd Ghazali Mohayidin, Price is the weapon of choice for many low cost airlines in the competition for market share. Regional low cost airlines' pricing strategy for market stimulation is issuing free tickets and competing in ticket prices setting. It has been assumed as an effective strategy in influencing customers' purchasing decision. This study has documented the differences in price setting dynamics across low cost airlines operating on one of the biggest regional market and six domestic routes. A total sample of 7883 fare quotes for nonstop travel from Kuala Lumpur to Singapore and 6 domestic routes have been examined. The employment of Granger Causality Test attempts to mathematically capture the competitive behaviour in price setting. The data evidence revealed the reality of price competitiveness among the low cost airlines and game theory suggests that price cooperative should be implemented by low cost airlines for long term sustainability. [ABSTRACT FROM AUTHOR] 2011 Article PeerReviewed Poh, Lim Seng and Mohd Ghazali Mohayidin, (2011) Competitive Pricing Strategies of Low Cost Airlines in the Perspective of Game theory. International Proceedings of Economics Development & Research, 10. pp. 490-494. http://library.oum.edu.my/repository/894/
institution Open University Malaysia
building OUM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Open University Malaysia
content_source OUM Knowledge Repository
url_provider http://library.oum.edu.my/repository/
description Price is the weapon of choice for many low cost airlines in the competition for market share. Regional low cost airlines' pricing strategy for market stimulation is issuing free tickets and competing in ticket prices setting. It has been assumed as an effective strategy in influencing customers' purchasing decision. This study has documented the differences in price setting dynamics across low cost airlines operating on one of the biggest regional market and six domestic routes. A total sample of 7883 fare quotes for nonstop travel from Kuala Lumpur to Singapore and 6 domestic routes have been examined. The employment of Granger Causality Test attempts to mathematically capture the competitive behaviour in price setting. The data evidence revealed the reality of price competitiveness among the low cost airlines and game theory suggests that price cooperative should be implemented by low cost airlines for long term sustainability. [ABSTRACT FROM AUTHOR]
format Article
author Poh, Lim Seng
Mohd Ghazali Mohayidin,
spellingShingle Poh, Lim Seng
Mohd Ghazali Mohayidin,
Competitive Pricing Strategies of Low Cost Airlines in the Perspective of Game theory
author_facet Poh, Lim Seng
Mohd Ghazali Mohayidin,
author_sort Poh, Lim Seng
title Competitive Pricing Strategies of Low Cost Airlines in the Perspective of Game theory
title_short Competitive Pricing Strategies of Low Cost Airlines in the Perspective of Game theory
title_full Competitive Pricing Strategies of Low Cost Airlines in the Perspective of Game theory
title_fullStr Competitive Pricing Strategies of Low Cost Airlines in the Perspective of Game theory
title_full_unstemmed Competitive Pricing Strategies of Low Cost Airlines in the Perspective of Game theory
title_sort competitive pricing strategies of low cost airlines in the perspective of game theory
publishDate 2011
url http://library.oum.edu.my/repository/894/
_version_ 1644309122172059648
score 13.160551

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