determine if current airline price data provide evidence of the airline practice of 3rd-degree price discrimination. As a foundation for the research, the paper will explain the theory of 3rd-degree price discrimination and how it is implemented in the airline industry. To obtain some limited price data, choose any city pair and two competing airlines. A network and low-cost carrier make an interesting comparison, but any airlines of interest are acceptable. For each airline, obtain the four (4) prices for a typical round-trip itinerary with bookings for 1 day and for 1, 2, and 4 weeks in advance of the departure date. Itineraries with closer departure dates are more likely to be purchased by business travelers. Leisure travelers, on the other hand, usually book well in advance of the travel date.
To isolate the effects of advance purchase, the itineraries should depart and return the same days of the week at approximately the same time of day. Try to avoid the influence of holidays or other seasonal effects on demand. Use the airlines’ websites for all fare information.
There is a standard organization for research papers. Your paper should have the following sections: 1. Introduction, 2. Theory of 3rd-Degree Price Discrimination, 3. Airline Practice of Price Discrimination, 4. Hypothesis, 5. Methodology, 6. Data, and 7. Conclusion.
