Research

My research combines economic theory and frontier computational econometric methods to study price discrimination strategies and how they affect consumers. I focus on how firms can price discriminate effectively when facing dynamic and strategic consumers. Through a partnership with a North American airline, I examine various pricing mechanisms including dynamic pricing, upgrade auctions, and personalized discounting. I am currently exploring how consumers' flexibility across departure dates affects their price sensitivity and the impact of this flexibility on market definitions in air travel. In the future, I aim to apply these approaches to broader questions in industrial organization and other market settings.

Working Papers

• "Revenue Management with Reallocation" with Garrett Scott and Jonathan W. Williams.
  • Abstract

    We develop a model to study the trade-offs associated with introducing re-allocative mechanisms into dynamic-pricing environments with heterogeneous goods and strategic consumers. Our focus is on airlines that sell seats in vertically-differentiated cabins and provide upgrade opportunities after an initial purchase via auctions and fixed-price sales. If consumers anticipate opportunities for an improved reallocation and reduce outright purchases of premium seats, the screening intention of dynamically-set prices can be undermined to create circumstances with a greater probability of upgrades and an ambiguous impact on profits. To study ways to adapt these mechanisms to better complement dynamic-pricing practices, we estimate the model's structural parameters using proprietary data from an airline that includes the price for each itinerary, daily cabin-specific seat inventories for each flight, bids and purchases of upgrades, and information on visits and purchases on the airlines' website. We find that the mechanisms, as implemented, transfer a modest amount of surplus from the airline to consumers. In counterfactual calculations, we explore two ways to improve integration and performance. We find that profits and total welfare increase by either introducing state-specific reserve values to provide commitment for the airline to make the auction less accommodating to strategic consumers or making pricing policies dependent on submitted bids to internalize the option value of the auction while setting prices.

• "Should I Stay or Should I Go? An Empirical Analysis of Consumer Behavior Using Airline Web-Traffic Data" with Garrett Scott, Drew Van Kuiken, and Jonathan W. Williams. Revise & Resubmit at Economics of Transportation, Resubmitted.
  • Abstract

    We analyze consumer search and purchase behavior in response to airline revenue-management practices using data from a major carrier's website and Google Flights. We first describe patterns in search timing, purchase decisions, and paid fares. Then we estimate a multinomial logistic regression to identify factors driving search timing, finding that single adults with loyalty status, especially booking one-way nonstop itineraries, tend to search closer to departure. Next, we use a binary logistic model of conversions of searches to sales, showing that competitors' prices and changing customer composition explain rising conversion probabilities as departure nears. Finally, using a fixed-effects regression, we reveal how search and booking patterns affect prices paid. Late-arriving travelers, particularly single adults with loyalty status, pay substantially more, consistent with the airline's pricing strategies that segment more inelastic customers. Overall, our findings underscore how revenue-management, competitor fares, and consumer characteristics jointly shape online search and purchase behavior.

• "Allocating Upgrades: Challenges and Opportunities in the Airline Industry" with Garrett Scott and Jonathan W. Williams. Draft available upon request.
  • Abstract

    We study the allocation of premium-cabin upgrades through auctions and fixed-price sales at check-in. Our data comes from a major airline and includes information on ticket sales, aircraft inventory, and upgrade purchases and bids, before and after the introduction of the upgrade mechanisms. We use a model to identify challenges and trade-offs associated with these practices and highlight factors that can impact their effectiveness. As implemented, we find that these practices lead to a minimal increase in revenue because upgrade opportunities largely cannibalize outright premium-cabin sales. We show that information dissemination and framing offer meaningful opportunities to improve performance, and discuss how to avoid cannibalization through improved integration with existing revenue-management systems.

• "Personalized Pricing in the Airline Industry" with Andrii Babii, Garrett Scott, and Jonathan W. Williams.

Works in Progress

• "Consideration Sets with Intertemporally Related Goods: Evidence from an Airline"