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Mixed Oligopoly, Product Differentiation And Competition For Public Transport Services

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  • PEDRO CANTOS-SÁNCHEZ
  • RAFAEL MONER-COLONQUES

Abstract

This paper explores frequency and pricing decisions in a horizontally and vertically differentiated duopoly when there is competition between means of transport and where one of the firms need not necessarily maximize profits. The private and the mixed duopoly are compared and distortions from the social optimum are identified, both analytically and numerically. A mixed duopoly does not recover the socially optimal solution. However, the presence of a (public) non-profit maximizing operator is a useful measure to get closer to the social optimum. When both operators are (private) profit maximizers, some control measures such as price caps and minimum service availability would reduce the distortions from the social optimum. Copyright � 2006 The Authors; Journal compilation � Blackwell Publishing Ltd and The University of Manchester 2006.

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Bibliographic Info

Article provided by University of Manchester in its journal Manchester School.

Volume (Year): 74 (2006)
Issue (Month): 3 (06)
Pages: 294-313

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Handle: RePEc:bla:manchs:v:74:y:2006:i:3:p:294-313

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Cited by:
  1. Stefan Lutz & Mario Pezzino, 2010. "Mixed oligopoly, vertical product differentiation and fixed qualitydependent costs," The School of Economics Discussion Paper Series 1015, Economics, The University of Manchester.

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