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Old Apr 26, 16, 4:55 pm
  #99  
MSPeconomist
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Originally Posted by ashill View Post
Well, the DOT awards routes in competitive cases based on the greatest public good; that's the explicit legal standard. So if DL wants to win a route case, that's the standard by which they should make their case; the biggest part of making a compelling route case is choosing routes that maximize public good (while of course fitting within the airline's profitability and strategic objectives.) No matter how potentially-profitable is, if it serves the public good less than proposals by other airlines, it by law should not be awarded.
My point is that knowing this and using it to help form their probability assessments, DL should pick the strategy that maximizes its expected shareholder value. Maybe this leads to picking the strategy that maximizes overall public welfare in order to maximize the chances of getting the slots, but there's no reason to assume this.
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