Atomistic congestion tolls at concentrated airports? Seeking a unified view in the internalization debate
AbstractThe goal of this paper is to bring some unity to the theoretical side of the debate on internalization of airport congestion by showing that all the literature's theoretical results can be derived within one simple and unified framework. The analysis starts by replicating the results of Brueckner [Brueckner, J.K., 2002. Airport congestion when carriers have market power. American Economic Review 92, 1357-1375], who showed that, because airlines behaving in Cournot fashion internalize congestion, they should be charged low congestion tolls. The analysis then validates the findings of Daniel [Daniel, J.I., 1995. Congestion pricing and capacity of large hub airports: A bottleneck model with stochastic queues. Econometrica 63, 327-370], who argued that larger atomistic tolls are required in a model where a Stackelberg leader interacts with competitive fringe airlines. However, it is shown that this result only holds approximately when the carriers' outputs are imperfect substitutes.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Urban Economics.
Volume (Year): 64 (2008)
Issue (Month): 2 (September)
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Web page: http://www.elsevier.com/locate/inca/622905
Other versions of this item:
- Jan K. Brueckner & Kurt Van Dender, 2007. "Atomistic Congestion Tolls at Concentrated Airports? Seeking a Unified View in the Internalization Debate," CESifo Working Paper Series, CESifo Group Munich 2033, CESifo Group Munich.
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
- L90 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - General
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- Daniel, Joseph I. & Pahwa, Munish, 2000. "Comparison of Three Empirical Models of Airport Congestion Pricing," Journal of Urban Economics, Elsevier, Elsevier, vol. 47(1), pages 1-38, January.
- Jan K. Brueckner, 2002. "Airport Congestion When Carriers Have Market Power," American Economic Review, American Economic Association, American Economic Association, vol. 92(5), pages 1357-1375, December.
- Daniel, Joseph I., 2001. "Distributional Consequences of Airport Congestion Pricing," Journal of Urban Economics, Elsevier, Elsevier, vol. 50(2), pages 230-258, September.
- Daniel, Joseph I. & Harback, Katherine Thomas, 2008. "(When) Do hub airlines internalize their self-imposed congestion delays?," Journal of Urban Economics, Elsevier, Elsevier, vol. 63(2), pages 583-612, March.
- Basso, Leonardo J. & Zhang, Anming, 2007. "Congestible facility rivalry in vertical structures," Journal of Urban Economics, Elsevier, Elsevier, vol. 61(2), pages 218-237, March.
- Daniel, Joseph I, 1995. "Congestion Pricing and Capacity of Large Hub Airports: A Bottleneck Model with Stochastic Queues," Econometrica, Econometric Society, Econometric Society, vol. 63(2), pages 327-70, March.
- Brueckner, Jan K., 2005.
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- Jan K. Brueckner, 2002. "Internalization of Airport Congestion: A Network Analysis," CESifo Working Paper Series, CESifo Group Munich 756, CESifo Group Munich.
- Pels, Eric & Verhoef, Erik T., 2004.
"The economics of airport congestion pricing,"
Journal of Urban Economics, Elsevier,
Elsevier, vol. 55(2), pages 257-277, March.
- Eric Pels & Erik Verhoef, 2003. "The Economics of Airport Congestion Pricing," Tinbergen Institute Discussion Papers, Tinbergen Institute 03-083/3, Tinbergen Institute.
- Christopher Mayer & Todd Sinai, 2002.
"Network Effects, Congestion Externalities, and Air Traffic Delays: Or Why All Delays Are Not Evil,"
NBER Working Papers
8701, National Bureau of Economic Research, Inc.
- Christopher Mayer & Todd Sinai, . "Network Effects, Congestion Externalities, and Air Traffic Delays: Or Why All Delays Are Not Evil," Zell/Lurie Center Working Papers, Wharton School Samuel Zell and Robert Lurie Real Estate Center, University of Pennsylvania 393, Wharton School Samuel Zell and Robert Lurie Real Estate Center, University of Pennsylvania.
- Steven A. Morrison & Clifford Winston, 2007. "Another Look at Airport Congestion Pricing," American Economic Review, American Economic Association, American Economic Association, vol. 97(5), pages 1970-1977, December.
- Zhang, Anming & Zhang, Yimin, 2006. "Airport capacity and congestion when carriers have market power," Journal of Urban Economics, Elsevier, Elsevier, vol. 60(2), pages 229-247, September.
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