Department of Economics

Service Quality and Competition in the U.S Down- hill ski industry

Department of Economics

University of Delaware

Working Paper #2009-05

Service Quality and Competition in the U.S Down- hill ski industry

James Mulligan

ABSTRACT

This paper illustrates the importance of the role of land constraints in a model explaining the effect of real income and transportation cost on long-run lift-ticket prices and lift capacity in a competitive two-sector ski industry. The model also explains large endogenous increases in lift capacity and real prices over time in response to an increase in real skier income despite a static number of skier-days per year. This approach, thus, has points in common with work by Shaked and Sutton (1986 and 1987), Sutton (1991 and 1998) on endogenous vertical differentiation and persistent market concentration.

JEL Codes: L11, L83

Keywords: Skiing, Service Quality, Capacity, Pricing

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