Airline Non-Price Competition Between FSC and LCC Carriers: Varying Airline Optimization Strategies
by Lucas Johnson
Abstract
The goal of this paper is to extend the discourse surrounding certain topics in terms of airline
optimization which is defined in this paper as the ability of an airline to efficiently transport
goods and passengers as well as accrue revenue from its airplanes relative to its total capacity to
transport goods and accrue revenue. Previous literature deals heavily with the differences
between LCC and FSC carriers as well as the importance of both customer satisfaction and
operational efficiency for the ability of an airline to compete. The analysis of this paper is in the
form of a panel-regression performed on a dataset obtained from the T1 Airline Summary
Statistics form maintained by the Bureau of Transportation Statistics. This data demonstrates the
relationship between dependent variables represented by certain metrics of airline success,
revenue passengers enplaned, revenue passenger miles and revenue ton miles, with independent
variables that reflect optimization in terms of both payload and passenger transport. These
variables are influenced by factors such as certain measures of timeliness competition defined in
this analysis as ramp inefficiency and departure efficiency.
Professor Grace Kim, Faculty Advisor
JEL Codes: L93; D22; R4; L13
Competition and Innovation: Evidence from Third-Party Reprocessing in the Medical Device Industry
By Varun Prasad
Healthcare is projected to soon become the industry with the largest amount of spending on research and development in the world. While competition has the potential to catalyze the development of new healthcare technologies and drive down costs, increases in competition have also been thought to hinder innovation as a result of thinner profit margins and reduced incentives. I estimate whether and to what extent competition in the medical device industry promotes innovation. Using Food and Drug Administration data on medical device applications from 1976 to 2019, I examine how original equipment manufacturers respond to the entry of third-party reprocessed devices. I find that, when controlling for year and medical specialty, the introduction of a reprocessed device leads to an almost five-fold increase in new device applications by original manufacturers after both one and two years. These results suggest that an increase in competition within the medical device market has spurred innovation and the development of new technologies.
Advisors: Professor James Roberts, Professor David Ridley | JEL Codes: L1, D22, L65
The Effect of Competition on Strategic Discharge at Long-Term Acute-Care Hospitals
By Michael Karamardian
Because Medicare’s prospective payment system for long-term acute-care hospitals (LTCHs) makes a large lump-sum form of payment once patients reach a minimum length-ofstay threshold, LTCHs have a unique opportunity to maximize profits by strategically discharging patients as soon as the payment is received. This analysis explores how the level of competition between LTCHs in geographic markets affects the probability of a patient being strategically discharged. The results show that patients at LTCHs in more competitive markets have a lower probability of being strategically discharged than at those in less competitive markets, suggesting increased competition could help save Medicare funding.
Advisors: Kent Kimbrough and James Roberts | JEL Codes: D22, I11, I18
Are Hollywood Stars Worth the Price Tag?
By TJ Cole and Chris Foote
We investigate the effect of a lead actor’s popularity on the profitability of films. Google search data is used as a proxy for actor popularity. We then investigate if lead actor’s popularity has a different effect on movies that are not part of a sequel or franchise, and those that belong to specific genres. The most profitable movies are franchises and sequels. Movies are more
profitable when they are action movies rated G or PG, although in certain circumstances a small number of horror movies and musicals can be hugely profitable. We find that across all groups
of movies our proxy for lead actor popularity has no significant effect on a film’s profitability.
Advisor: Dr. Michelle Connolly | JEL Codes: D2, D22
The Impact of Online Streaming on Primetime Viewership An Econometric Analysis of Technological Change, Network Practices and Audience Behavior
By Yeshwanth Kandimalla
This study considers the impact of online streaming on the viewership of popular primetime programs aired on four major U.S broadcast networks: ABC, CBS, FOX and NBC. The time period considered will begin with the 2004-2005 TV season through the 2011-2012 season. Technological change, primarily with faster Internet speeds, spurred some growth of online video streaming. Furthermore, over this time period, the four major networks all authorized streaming at different levels. This variation in availability provides the heterogeneity needed to compare the effect of making programs available
online. The existing literature has posited two effects of online streaming: substitution away from traditional TV viewing due to lower costs or complementarity by drawing in additional viewers. Using this framework, this study conducts an empirical analysis of TV viewership and online availability with a panel of more than 3,500 episodes across 8 seasons and 42 programs. The results strongly suggest that online streaming options drive statistically significant substitution away from traditional TV viewing, a trend that can have major consequences for the distribution of TV programs and the broadcast TV business as a whole.
Advisor: Michael Munger, Michelle Connolly | JEL Codes: D12, D22, L82 | Tagged: Big Four, Cable Cord-cutting, FOX, Hulu, Network Television, Networks, Online Streaming
Market Power & Reciprocity Among Vertically Integrated Cable Providers
By Jeffery Shih-kai Shen
This paper seeks to investigate the effects of vertical integration on the cable industry. There are two main goals that the research paper will attempt to address. The first is to build upon existing research on favoritism shown by multichannel video programming distributors (MVPDs) to affiliated video programming networks. Second, the paper will use 2007 and 2010 industry data to investigate the possible existence of “quid pro quo” among vertically integrated MVPD cable providers. After evaluating the data with multivariate OLS Regressions, the evidence suggests that MVPD cable providers do tend to carry their own affiliated programming networks. Furthermore, the evidence supports the hypothesis that reciprocity relationships exist among major vertically integrated cable providers.
Advisors: Leslie Marx | JEL Codes: C01, D22, K21 | Tagged: Cable Provider, Empirical Analysis, Programming Distributor, Programming Network, Vertical Integration
Book-building versus Auctions: An investigation into which IPO pricing and selling method more effectively promotes the aims of an IPO issuer
by Amrith Krushnakumaar
Abstract
In recent years, book-building has emerged as a method of choice among investment banks in the U.S and around the world for pricing and selling initial public offerings (IPOs). Proponents of the book-building method argue that discriminatory share allocations, the pooling of IPOs and other standard book-building practices price new shares more accurately, thus enabling the issuer to maximize proceeds received from the IPO, and minimize fluctuations in share price immediately after the IPOs. However, in view of the average first-day price increases common among IPOs marketed by the book-building method, and the potential for investment banks to abuse their power when allocating shares, skeptics claim that book-building is inadequate in helping the issuer meet its aims. Amid calls by regulators and critics to reform the existing book-building method, W.R Hambrecht, an investment bank, introduced the auction method of pricing and selling IPOs for the first time in the United States in 1999. This paper aims to determine which method might be more effective in promoting an issuer’s aims by employing a matched methodology to fairly compare more recent book-building and auction IPOs in the U.S.
Professor Edward Tower, Faculty Advisor
Professor Allen H. Huang, Faculty Advisor
JEL Codes: D21, D22, E44, G1,
