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Airport Privatization And International Competition

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  • TOSHIHIRO MATSUMURA
  • NORIAKI MATSUSHIMA

Abstract

We provide a simple theoretical model to explain the mechanism wherebyprivatization of international airports can improve welfare. The model consists of a downstream (airline) duopoly with two inputs (landings at two airports) andtwo types of consumers. The airline companies compete internationally. Using thesimple international duopoly model, we show that the outcome where both airportsare privatized is always an equilibrium while that where no airport is privatized is another equilibrium only if the degree of product differentiation is large.

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File URL: http://hdl.handle.net/10.1111/10.1111/jere.2012.63.issue-4
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Bibliographic Info

Article provided by Japanese Economic Association in its journal Japanese Economic Review.

Volume (Year): 63 (2012)
Issue (Month): 4 (December)
Pages: 431-450

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Handle: RePEc:bla:jecrev:v:63:y:2012:i:4:p:431-450

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  1. Pels, Eric & Verhoef, Erik T., 2004. "The economics of airport congestion pricing," Journal of Urban Economics, Elsevier, vol. 55(2), pages 257-277, March.
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Cited by:
  1. Noriaki Matsushima & Kazuhiro Takauchi, 2013. "Port Privatization in an International Oligopoly," ISER Discussion Paper 0864, Institute of Social and Economic Research, Osaka University.
  2. Czerny, Achim & Höffler, Felix & Mun, Se-il, 2013. "Port Competition and Welfare Effect of Strategic Privatization," EWI Working Papers 2013-13, Energiewirtschaftliches Institut an der Universitaet zu Koeln.
  3. Lin, Ming Hsin, 2013. "Airport privatization in congested hub–spoke networks," Transportation Research Part B: Methodological, Elsevier, vol. 54(C), pages 51-67.
  4. Benoot, W. & Brueckner, J.K. & Proost, S., 2013. "Intercontinental-airport regulation," Transportation Research Part B: Methodological, Elsevier, vol. 52(C), pages 56-72.
  5. van den Berg, Vincent A.C., 2013. "Serial private infrastructures," Transportation Research Part B: Methodological, Elsevier, vol. 56(C), pages 186-202.

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