Measuring the degree of competition in markets is important for setting competition and regulatory policy as well as developing management strategies. Commonly used structural indices, such as the HHI, overlook the way in which firms compete and, hence, set their prices in markets. We propose a new horizontal differentiation measure, which encapsulates firms’ portfolio of products as well as the degree of overlap and substitution between competing services. Applied to aviation markets, we term this measure Schedule Differentiation Metric, or SDM, and we demonstrate the significant importance of SDM in explaining price levels and structure.
This work is a collaboration with David Gillen, Tuba Delibasi, and Vijay Kumar.
About the Speaker
Dr. Benny Mantin is a full professor and the Director of the Luxembourg Centre of Logistics and Supply Chain Management (LCL), at the University of Luxembourg, which is a member of the MIT’s SCALE network. His research covers diverse aspects of supply chain management, dynamic pricing, and revenue management, as well as transportation economics. More recently he has been working on sustainability in supply chains and harnessing technology to drive digital operations. His work was published in leading journals such as Productions and Operations Management, Marketing Science, EJOR as well as Transportation Research Parts A, B and E. His research has been recognized and supported by several grants. Prof. Mantin is a board member of the Journal of Air Transport Management, and he is on the advisory board of the European Aviation Conference. He joined the University of Luxembourg in 2017 following a tenure of 9 years at the University of Waterloo.