Exchange-rate Misalignments in Duopoly: The Case of Airbus and Boeing - Archive ouverte HAL Accéder directement au contenu
Article Dans Une Revue The World Economy Année : 2011

Exchange-rate Misalignments in Duopoly: The Case of Airbus and Boeing

Résumé

We examine the effect of exchange-rate misalignments on competition in the market for large commercial aircraft. This market is a duopoly where players compete in dollar-denominated prices while one of them, Airbus, incurs a large fraction of its costs in euro. We estimate price elasticities for big aircraft, and construct a simulation model to investigate how companies adjust their prices to deal with the effects of a temporary misalignment and how this affects profit margins and volumes. We conclude that, due to the duopolistic nature of the aircraft market, Airbus will pass only a small part of the exchange-rate fluctuations on to customers. Moreover, due to features specific to the aircraft industry, such as customer switching costs and learning-by-doing, even a temporary departure of the exchange rate from its long-run equilibrium level may have permanent effects on the industry.
Fichier principal
Vignette du fichier
eads_prepeer.pdf (246.54 Ko) Télécharger le fichier
Origine : Fichiers produits par l'(les) auteur(s)
Loading...

Dates et versions

hal-00603386 , version 1 (24-06-2011)

Identifiants

Citer

Agnès Bénassy-Quéré, Lionel Fontagné, Horst Raff. Exchange-rate Misalignments in Duopoly: The Case of Airbus and Boeing. The World Economy, 2011, 34 (4), pp.623-641. ⟨10.1111/j.1467-9701.2011.01338.x⟩. ⟨hal-00603386⟩
210 Consultations
2460 Téléchargements

Altmetric

Partager

Gmail Facebook X LinkedIn More