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The Deterministic Bottleneck Model with Non-Atomistic Traffic

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Author Info
Joseph I. Daniel () (Department of Economics,University of Delaware)

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Abstract

This paper investigates the conditions under which dominant airlines internalize self-imposed delays in a deterministic bottleneck model of airport congestion, complementing Brueckner and Van Dender's (2008) similar analysis for the standard congestion-pricing model. A unified model of congestion tolling includes untolled, uniform-, coarse-, multi-step, and fine-toll equilibria as specific cases. It provides a rigorous theoretical foundation for Daniel's (1995, 2008) empirical findings that dominant airlines often ignore self-imposed delays, by modeling three motivations for atomistic behavior: preempting potential entry by additional fringe aircraft; occupying higher valued service periods; and displacing actual fringe entrants that have more dispersed operating-time preferences. In each case, atomistic behavior generates queues that deter fringe operations. Unlike Daniel’s stochastic bottleneck model, this deterministic model provides explicit closed-form solutions for optimal tolls. Dominant and fringe tolls generally differ by constant amounts (if at all) rather than varying in inverse proportion to market share as in Brueckner and Van Dender's model.

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Publisher Info
Paper provided by University of Delaware, Department of Economics in its series Working Papers with number 09-08.

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Length: 37 pages
Date of creation: 2009
Date of revision:
Handle: RePEc:dlw:wpaper:09-08.

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Postal: Purnell Hall, Newark, Delaware 19716
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Web page: http://www.lerner.udel.edu/departments/economics/
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Related research
Keywords: airport congestion; slot constraints; pricing; bottleneck; queuing.;

Find related papers by JEL classification:
R4 - Urban, Rural, and Regional Economics - - Transportation Systems
H2 - Public Economics - - Taxation, Subsidies, and Revenue
L5 - Industrial Organization - - Regulation and Industrial Policy
L9 - Industrial Organization - - Industry Studies: Transportation and Utilities

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  1. Jan K. Brueckner, 2002. "Airport Congestion When Carriers Have Market Power," American Economic Review, American Economic Association, vol. 92(5), pages 1357-1375, December. [Downloadable!]
  2. Arnott, Richard & de Palma, Andre & Lindsey, Robin, 1990. "Economics of a bottleneck," Journal of Urban Economics, Elsevier, vol. 27(1), pages 111-130, January. [Downloadable!] (restricted)
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  3. Vickrey, William S, 1969. "Congestion Theory and Transport Investment," American Economic Review, American Economic Association, vol. 59(2), pages 251-60, May. [Downloadable!] (restricted)
  4. Christopher Mayer & Todd Sinai, 2003. "Network Effects, Congestion Externalities, and Air Traffic Delays: Or Why Not All Delays Are Evil," American Economic Review, American Economic Association, vol. 93(4), pages 1194-1215, September. [Downloadable!]
  5. Brueckner, Jan K. & Van Dender, Kurt, 2008. "Atomistic congestion tolls at concentrated airports? Seeking a unified view in the internalization debate," Journal of Urban Economics, Elsevier, vol. 64(2), pages 288-295, September. [Downloadable!] (restricted)
  6. Daniel, Joseph I. & Pahwa, Munish, 2000. "Comparison of Three Empirical Models of Airport Congestion Pricing," Journal of Urban Economics, Elsevier, vol. 47(1), pages 1-38, January. [Downloadable!] (restricted)
  7. Daniel, Joseph I, 1995. "Congestion Pricing and Capacity of Large Hub Airports: A Bottleneck Model with Stochastic Queues," Econometrica, Econometric Society, vol. 63(2), pages 327-70, March. [Downloadable!] (restricted)
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This page was last updated on 2009-11-27.

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