A Model of Partial Regulation in the Maritime Ferry Industry
AbstractIn this paper, we study how maritime ferry industries should be regulated. This is a fundamental issue in so far as maritime transport between islands and mainland is a service of general interest. We argue that the policy design crucially depends on the goals the collectivity pursues (pure eÂ¢ ciency, fairness) as well as on the relevant industry structure (monopoly, oligopoly). We show that the regulator needs to prevent ineÂ¢ cient crowding out, whenever room exists for access of new providers to former monopolies. By properly allocating traÂ¢ c across shippers, the regulated firm's budget constraint can then be relaxed. We subsequently shed light on the implications of adopting the territorial continuity principle to boost social fairness. We establish that the incumbent's public service obligations dump the entrant's incentives to provide connections in the low season; conversely, soft competition encourages the entrant to operate in the high season, when it pockets a net rent. As to customers, our model predicts that the islanders, whose consumption is partly subsidized by the non-residents, patronize the incumbent and that liberalization directly benefits the non-residents who switch to the entrant.
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 InfoPaper provided by Dipartimento di Scienze Economiche e Metodi Matematici - Università di Bari in its series series with number 0010.
Date of creation: Jan 2006
Date of revision: Jan 2006
Maritime transport; Price and frequency; Partial regulation; Territorial;
Find related papers by JEL classification:
- L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
- L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation
- R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Systems - - - Government Pricing and Policy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-01-29 (All new papers)
- NEP-COM-2006-01-29 (Industrial Competition)
- NEP-CSE-2006-01-29 (Economics of Strategic Management)
- NEP-MIC-2006-01-29 (Microeconomics)
- NEP-REG-2006-01-29 (Regulation)
- NEP-TUR-2006-01-29 (Tourism Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- CREMER, Helmuth & MARCHAND, Maurice & THISSE, Jacques-François, .
"The public firm as an instrument for regulating an oligopolistic market,"
CORE Discussion Papers RP
-832, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Cremer, Helmuth & Marchand, Maurice & Thisse, Jacques-Francois, 1989. "The Public Firm as an Instrument for Regulating an Oligopolistic Market," Oxford Economic Papers, Oxford University Press, vol. 41(2), pages 283-301, April.
- Cremer, H. & Marchand, M. & Thisse, J.-F., 1987. "The public firm as an instrument for regulating an oligopolistic market," CORE Discussion Papers 1987010, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Cremer, H. & De Rycke, M. & Grimaud, A., 1996.
"Service Quality, Competition and Regulatory Policies in the Postal Sector,"
95.391, Toulouse - GREMAQ.
- Cremer, Helmuth & De Rycke, Marc & Grimaud, Andre, 1997. "Service Quality, Competition, and Regulatory Policies in the Postal Sector," Journal of Regulatory Economics, Springer, vol. 11(1), pages 5-19, January.
- Delipalla, Sofia & Keen, Michael, 1992.
"The comparison between ad valorem and specific taxation under imperfect competition,"
Journal of Public Economics,
Elsevier, vol. 49(3), pages 351-367, December.
- Sofia Delipalla & Michael Keen, 1991. "The Comparison Between Ad Valorem and Specific Taxation under Imperfect Competition," Working Papers 821, Queen's University, Department of Economics.
- Billette de Villemeur, Etienne, et al, 2003. "Optimal Pricing and Price-Cap Regulation in the Postal Sector," Journal of Regulatory Economics, Springer, vol. 24(1), pages 49-62, July.
- De Fraja, Gianni & Iozzi, Alberto, 2004. "Bigger and Better: A Dynamic Regulatory Mechanism for Optimum Quality," CEPR Discussion Papers 4502, C.E.P.R. Discussion Papers.
- Cremer, Helmuth, et al, 2001. "Entry and Competition in the Postal Market: Foundations for the Construction of Entry Scenarios," Journal of Regulatory Economics, Springer, vol. 19(2), pages 107-21, March.
- Billette de Villemeur, Etienne, 2004. "Regulation in the air: price-and-frequency caps," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 40(6), pages 465-476, November.
- Bulow, Jeremy I & Geanakoplos, John D & Klemperer, Paul D, 1985. "Multimarket Oligopoly: Strategic Substitutes and Complements," Journal of Political Economy, University of Chicago Press, vol. 93(3), pages 488-511, June.
- Estrin, Saul & de Meza, David, 1995. "Unnatural monopoly," Journal of Public Economics, Elsevier, vol. 57(3), pages 471-488, July.
- David Martimort, 2006. "An Agency Perspective on the Costs and Benefits of Privatization," Journal of Regulatory Economics, Springer, vol. 30(1), pages 5-44, 07.
- Wilson, Robert, 1997. "Nonlinear Pricing," OUP Catalogue, Oxford University Press, number 9780195115826.
- Gatta, Valerio & Marcucci, Edoardo, 2007.
"Quality and public transport service contracts,"
European Transport \ Trasporti Europei,
ISTIEE, Institute for the Study of Transport within the European Economic Integration, issue 36, pages 92-106.
- Angela S. Bergantino & Etienne Billette De Villemeur & Annalisa Vinella, 2011.
"Partial Regulation in Vertically Differentiated Industries,"
Journal of Public Economic Theory,
Association for Public Economic Theory, vol. 13(2), pages 255-287, 04.
- Bergantino, Angela Stefania & de Villemeur, Étienne & Vinella, Annalisa, 2007. "Partial Regulation in Vertically Differentiated Industries," IDEI Working Papers 502, Institut d'Économie Industrielle (IDEI), Toulouse, revised Apr 2010.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ruggiero Marco Paolillo).
If references are entirely missing, you can add them using this form.