On Competition and Product Differentiation in Urban Transportation: The San Francisco Bay Area
AbstractThis article considers Cournot-like competition among two public transit oligopolists (a rapid-rail system modeled on the Bay Area's BART, and a parallel bus system) in the presence of a competitively supplied third alternative. The oligopolists compete in both service quality and price, and do so myopically. With demand and cost data from the Bay Area numerically estimated equilibria are obtained and studied. The results indicate that: (1) with fares and product characteristics freely variable, neither mode need operate at a loss; (2) the rapid-rail mode can cover costs from the farebox even if the bus mode offers money-losing service; (3) the equilibria exhibit product differentiation, in sharp contrast to the presently observed situation.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by The RAND Corporation in its journal Bell Journal of Economics.
Volume (Year): 12 (1981)
Issue (Month): 2 (Autumn)
Contact details of provider:
Web page: http://www.rje.org
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.