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Rivalry between airport ancillary and city-center supplies

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  • Czerny, Achim I.
  • Zhang, Hanxiang

Abstract

Passengers can buy souvenirs or rent a car at the airport or in the city-center. This paper develops a basic model with unit demands for airport ancillary and city-center demands to derive equilibrium pricing strategies of profit-maximizing airports and city-center companies and evaluates them from the social viewpoint. Passengers are myopic in the sense that only ticket prices matter for flight decisions or foresighted in the sense that non-aeronautical airport and city-center supplies matter for flight decisions, too. We find that the welfare evaluation of equilibrium airport pricing behavior can be independent of whether passengers are myopic or foresighted.

Suggested Citation

  • Czerny, Achim I. & Zhang, Hanxiang, 2020. "Rivalry between airport ancillary and city-center supplies," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 141(C).
    • Handle: RePEc:eee:transe:v:141:y:2020:i:c:s1366554520306384
    DOI: 10.1016/j.tre.2020.101987
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    4. D’Amico, Giuseppe, 2022. "Platform competition and consumer foresight: The case of airports," Economics of Transportation, Elsevier, vol. 29(C).

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