Grandfather rights in the market for airport slots
AbstractGrandfather rights are currently used in the European Union to allocate airport slots. This article shows that airports prefer such a use-it-or-lose-it rule to unconditional property rights. Assuming that there are informational asymmetries between airports and air carriers because air carriers have better information on passenger demand, the use-it-or-lose-it rule increases slot use when demand for air transport is low. Airport profits increase and those of the air carriers, together with social welfare, decrease. The profit-maximizing slot-use ratio is less than one.
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Bibliographic InfoArticle provided by Elsevier in its journal Transportation Research Part B: Methodological.
Volume (Year): 44 (2010)
Issue (Month): 1 (January)
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Web page: http://www.elsevier.com/wps/find/journaldescription.cws_home/548/description#description
Other versions of this item:
- Sieg, Gernot, 2009. "Grandfather rights in the market for airport slots," Economics Department Working Paper Series 4, Technische Universität Braunschweig, Economics Department.
- L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation
- R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Systems - - - Government Pricing and Policy
- D42 - Microeconomics - - Market Structure and Pricing - - - Monopoly
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