There’s nothing quite like the feeling of securing a lower airfare than what you were expecting. Maybe an airline was having a sale; maybe you took advantage of a mistake fare. But there’s also an entire subculture dedicated to figuring out how to get the best fares every time you’re looking to fly. This, in turn, has led to plenty of articles dispelling myths about the costs of flying — including the idea that your browser history could influence the ticket prices you’re seeing.
Now, the authors of a new paper have come up with an even bigger instance of debunking — namely, making the case that most of the things travelers think could have a bearing on the ticket prices they’re seeing don’t have have any bearing on it at all.
That’s the gist of “Organizational Structure and Pricing: Evidence from a Large U.S. Airline,” recently published by The Quarterly Journal of Economics. As the paper’s authors told Dylan Walsh of Phys.org, a lot of the conventional wisdom doesn’t hold up to scientific scrutiny.
That includes some unexpected details from the academics’ work. Olivia Natan, who teaches at the Haas School of Business, told Walsh about an interesting clash within airlines themselves. “We talked to all of these managers who said the pricing team doesn’t know what it’s doing,” Natan said.
As for whether a buyer’s location could have an impact on the airfares they’re seeing, Natan was skeptical there as well. “Airline tickets are sold through global distribution systems that make sure a travel agent in Wichita sees the same price as you do on your computer at home,” she told Phys.org.
In their paper’s abstract, the authors noted that “airline pricing is not well approximated by a model of the firm as a unitary decision-maker.” There are plenty of things to focus on when buying a plane ticket; the work done by Natan and her collaborators is a good indication for the things out of travelers’ control.
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