Incentives and Competition in the Airline Industry

2019 ◽  
Vol 8 (2) ◽  
pp. 380-428 ◽  
Author(s):  
Rajesh K Aggarwal ◽  
Carola Schenone
Keyword(s):  
Airline Industry ◽  
Strategic Complements ◽  
Time Performance ◽  
Executive Incentives ◽  
Strategic Gaming ◽  
Editorial Decision

Abstract We examine how performance changes at airlines in response to a change in executive incentives. Airlines with executive bonuses contingent on on-time arrival do improve on-time performance. We find evidence of strategic gaming of the incentive as some carriers increase scheduled flight times, making it easier for flights to arrive on time. This effect is more pronounced for competitive routes. Carriers also do not decrease the frequency of flights or the number of passengers to make it easier to be on time, but they do slightly decrease fares. Competitors on the same routes also improve their on-time performance, even when their executive bonuses are not contingent on on-time performance, consistent with competition in strategic complements. (JEL G30, G34, G32) Received February 5, 2018; editorial decision April 3, 2019 by Editor Andrew Ellul.

scholarly journals Airline Financial Distress and Customer Satisfaction

2011 ◽  
Vol 48 (1) ◽  
Author(s):  
Dina Ribbink ◽  
Christian Hofer ◽  
Martin Dresner
Keyword(s):  
Customer Service ◽  
Airline Industry ◽  
Financial Distress ◽  
Service Levels ◽  
The Third ◽  
Time Performance ◽  
Using Data ◽  
Relationship Of ◽  
The Impact ◽  
The Relationship

An investigation is conducted on the effect of financial distress on customer service levels in the U.S. airline industry. Using data from the first quarter of 1998 to the third quarter of 2006, we employ a seemingly unrelated regressions (SUR) model to analyze the impact of financial distress on three measures of customer service. We find that higher financial distress is associated with better on-time performance of airlines and fewer lost bags. The relationship of airline financial distress to the number of bumped customers, however, is insignificant.

Managerial Attributes, Incentives, and Performance

2020 ◽  
Author(s):  
Jeffrey L Coles ◽  
Zhichuan (Frank) Li
Keyword(s):  
Fixed Effects ◽  
Parameter Estimates ◽  
Firm Risk ◽  
Managerial Ability ◽  
Corporate Policies ◽  
Executive Incentives ◽  
Editorial Decision ◽  
And Performance ◽  
Policy Risk ◽  
Time Invariant

Abstract We examine the relative importance of observed and unobserved firm- and manager-specific heterogeneities in determining executive compensation incentives and firm policy, risk, and performance. First, we decompose executive incentives into time-variant and time-invariant firm and manager components. Manager fixed effects supply 73% (60%) of explained variation in delta (vega). Second, controlling for manager fixed effects alters parameter estimates and corresponding inference on observed firm and manager characteristics. Third, larger CEO delta (vega) fixed effects predict better firm performance (riskier corporate policies and higher firm risk). These results suggest that the delta (vega) fixed effect captures managerial ability (risk aversion). (JEL G3, G32, G34, J24, J31, J33) Received September 7, 2018; editorial decision February 21, 2020 by Editor Andrew Ellul.

Extraversion and Dopamine

1998 ◽  
Vol 3 (1) ◽  
pp. 37-50 ◽  
Author(s):  
Thomas H. Rammsayer
Keyword(s):  
Individual Differences ◽  
D2 Receptor ◽  
D2 Receptors ◽  
Behavioral Differences ◽  
Biological Mechanisms ◽  
Brain Dopamine ◽  
Personality Dimension ◽  
Time Performance ◽  
Reaction Time Performance ◽  
Induced Changes

Recent research suggests that individual differences in brain dopamine (DA) functioning may be related to the personality dimension of extraversion. The present study was designed to further elucidate the biological mechanisms underlying behavioral differences between extraverts and introverts. For this purpose, the differential effects of a pharmacologically induced blockade of mesolimbocortical DA D2 receptors on reaction-time performance were investigated in 24 introverted and 24 extraverted subjects. Introverts were found to be much more susceptible to pharmacologically induced changes in D2 receptor activity than extraverts. This finding provides additional experimental evidence for the notion that individual differences in D2 receptor responsivity may represent a neurobiological substratum for the personality dimension of extraversion.

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