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Trip Chaining: Who Wins Who Loses?

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  • Andre de Palma
  • Fay Dunkerley
  • Stef Proost

Abstract

"This paper studies how trip chaining (combining commuting and shopping or commuting and child care) affects market competition: in particular, pricing and the equilibrium number of firms as well as welfare. We use a monopolistic competition framework, where firms sell differentiated products as well as offering differentiated jobs to households, who are all located at some distance from the firms. The symmetric equilibriums with and without the option of trip chaining are compared. We show analytically that introducing the trip chaining option reduces the profit margin of the firms in the short run, but increases welfare. The welfare gains are, however, smaller than the transport cost savings. In the free-entry long-run equilibrium, the number of firms decreases but welfare is higher. A numerical illustration gives orders of magnitude of the different effects." Copyright (c) 2010, The Author(s) Journal Compilation (c) 2010 Wiley Periodicals, Inc..

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Article provided by Wiley Blackwell in its journal Journal of Economics & Management Strategy.

Volume (Year): 19 (2010)
Issue (Month): 1 (03)
Pages: 223-258

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Handle: RePEc:bla:jemstr:v:19:y:2010:i:1:p:223-258

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References

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  1. Bhat, Chandra R. & Frusti, Teresa & Zhao, Huimin & Schönfelder, Stefan & Axhausen, Kay W., 2004. "Intershopping duration: an analysis using multiweek data," Transportation Research Part B: Methodological, Elsevier, vol. 38(1), pages 39-60, January.
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  3. Anderson, Simon P & de Palma, Andre, 2001. "Product Diversity in Asymmetric Oligopoly: Is the Quality of Consumer Goods Too Low?," Journal of Industrial Economics, Wiley Blackwell, vol. 49(2), pages 113-35, June.
  4. André de Palma & Fay Dunkerley & Stef Proost, 2006. "Trip chaining: who wins who loses?," Center for Economic Studies - Discussion papers ces0607, Katholieke Universiteit Leuven, Centrum voor Economische Studiën.
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  8. Andre de Palma & Stef Proost & Fay Dunkerley, 2004. "Imperfect Competition and Congestion in a City with asymmetric subcenters," Energy, Transport and Environment Working Papers Series ete0411, Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Energy, Transport and Environment.
  9. David Hensher & April Reyes, 2000. "Trip chaining as a barrier to the propensity to use public transport," Transportation, Springer, vol. 27(4), pages 341-361, December.
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  12. Daniel McFadden, 1977. "Modelling the Choice of Residential Location," Cowles Foundation Discussion Papers 477, Cowles Foundation for Research in Economics, Yale University.
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  14. Claycombe, Richard J. & Mahan, Tamara E., 1993. "Spatial aspects of retail market structure beef pricing revisited," International Journal of Industrial Organization, Elsevier, vol. 11(2), pages 283-291, June.
  15. Arun Kuppam & Ram Pendyala, 2001. "A structural equations analysis of commuters' activity and travel patterns," Transportation, Springer, vol. 28(1), pages 33-54, February.
  16. Kay Axhausen & Andrea Zimmermann & Stefan Schönfelder & Guido Rindsfüser & Thomas Haupt, 2002. "Observing the rhythms of daily life: A six-week travel diary," Transportation, Springer, vol. 29(2), pages 95-124, May.
  17. Bhat, Chandra R., 2008. "The multiple discrete-continuous extreme value (MDCEV) model: Role of utility function parameters, identification considerations, and model extensions," Transportation Research Part B: Methodological, Elsevier, vol. 42(3), pages 274-303, March.
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Citations

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Cited by:
  1. André De Palma & Fay Dunkerley & Stef Proost, 2008. "Trip chaining: Who wins who loses?," Working Papers hal-00348451, HAL.
  2. André De Palma & Fay Dunkerley & Stef Proost, 2005. "Asymmetric Duopoly in Space - what policies work?," ERSA conference papers ersa05p494, European Regional Science Association.
  3. Russo, Antonio, 2012. "Voting on Road Congestion Policy," TSE Working Papers 12-310, Toulouse School of Economics (TSE), revised Nov 2012.
  4. Takahashi, Takaaki, 2013. "Agglomeration in a city with choosy consumers under imperfect information," Journal of Urban Economics, Elsevier, vol. 76(C), pages 28-42.

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