PSYS.org: “Buy your ticket on a Tuesday. Search in your browser’s incognito mode. Use a VPN to pretend you live in Suriname. “There are so many hacks out there for finding cheaper airline tickets,” says Olivia Natan, an assistant professor of marketing at the Haas School of Business. “But our data shows many of these beliefs are wrong.” With four colleagues—Ali Hortaçsu and Timothy Schwieg from the University of Chicago, Kevin Williams from Yale, and Hayden Parsley from the University of Texas at Austin—Natan looked deeply into the structure and processes behind how prices are set at a major U.S. airline. The system that she found, which is representative of airlines around the world, was strikingly at odds with what most economists would expect—and most consumers assume.
- The paper, “Organizational Structure and Pricing: Evidence from a Large U.S. Airline” was published in The Quarterly Journal of Economics.