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Competing Transport Networks


Author Info

  • Marco J. van der Leij

    (Faculty of Economics, Erasmus University Rotterdam)


In a circular city model, I consider network design and pricing decisions for asingle fast transport connection that faces competition from a slower but betteraccessible transport mode. To access the fast transport network individuals haveto make complementary trips by slow mode. This fact has interesting implicationson the location decisions. I show that in the presence of competition the profit-maximizingand socially optimal decision would be to cluster the two stations. Bycontrast, in the absence of competition both a profit-maximizing firm and a socialplanner would locate the two stations on opposite sides of the circle.

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Bibliographic Info

Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 03-009/1.

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Date of creation: 23 Jan 2003
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Handle: RePEc:dgr:uvatin:20030009

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Keywords: Networks; Transportation; Competition; Market area; Circular city.;

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  1. NiƩrat, Patrick, 1997. "Market area of rail-truck terminals: Pertinence of the spatial theory," Transportation Research Part A: Policy and Practice, Elsevier, vol. 31(2), pages 109-127, March.
  2. Hendricks, Ken & Piccione, Michele & Tan, Guofu, 1995. "The Economics of Hubs: The Case of Monopoly," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 62(1), pages 83-99, January.
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Cited by:
  1. K.J.M. De Jaegher & B. Hoyer, 2010. "Strategic Network Disruption and Defense," Working Papers, Utrecht School of Economics 10-13, Utrecht School of Economics.


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