Journal title
REBRAE

   
Home  /  REBRAE  /  Vol: 10 Núm: 1 Par: 0 (2017)  /  Article
ARTICLE
TITLE

WEBJET’S COMPETITIVE STRATEGY FROM A GAME THEORY PERSPECTIVE

SUMMARY

The Brazilian commercial aviation market has undergone several changes over the past decade with the entry of GOL Airlines (1999) and the exit of firms such as TRANSBRASIL, VARIG and VASP. In 2005, WEBJET obtained a concession for regular public transport, but faced a price war with the traditional companies, coming to suspend its operations less than six months later. Regarding these events, this article aims to show how the reaction of incumbent firms was to the entry of WEBJET into the marketplace, by using Game Theory and the support of the literature on barriers to entry. Through the creation and the resolution of a Dynamic Game of Complete and Imperfect Information, it has been found that WEBJET seems to have underestimated the reaction of the incumbent firms like GOL and TAM, as well as the degree of passengers´ loyalty to the incumbent firms.

KEYWORDS

PAGES
pp. 131 - 149

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