Advanced Search
MyIDEAS: Login to save this paper or follow this series

Spatial asymmetric duopoly with an application to Brussels’ airports

Contents:

Author Info

  • Fay Dunkerley

    ()
    (CES – KU Leuven, Belgium)

  • André de Palma

    ()
    (THEMA, Univ de Cergy Pontoise, France & ENPC)

  • Stef Proost

    ()
    (CES – KU Leuven, Belgium, CORE, Belgium)

Abstract

We study the problem of a city with access to two firms or subcentres (restaurants, airports) selling a differentiated product and/or offering a differentiated workplace. The first subcentre is easily congested (near city centre, access by road), the second less prone to congestion but further away. Both need to attract customers and employees and need to make profits to cover their fixed costs. This is an asymmetric duopoly game that can be solved for a Nash equilibrium in prices and wages. This solution involves excessive congestion for the nearby subcentre. Three stylised policies are studied to address this congestion. The first policy is to widen the congested road to the nearby subcentre. The second policy option is to add congestion pricing (or parking pricing etc.) for the congested subcentre. The third policy is to provide a direct subsidy to the remote subcentre so that it can reduce its price. We illustrate the theory using a numerical model applied to the two Brussels airports.

Download Info

If 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.
File URL: http://www.u-cergy.fr/thema/repec/2007-14.pdf
Download Restriction: no

Bibliographic Info

Paper provided by THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise in its series THEMA Working Papers with number 2007-14.

as in new window
Length:
Date of creation: 2007
Date of revision:
Handle: RePEc:ema:worpap:2007-14

Contact details of provider:
Postal: 33, boulevard du port - 95011 Cergy-Pontoise Cedex
Phone: 33 1 34 25 60 63
Fax: 33 1 34 25 62 33
Email:
Web page: http://thema.u-cergy.fr
More information through EDIRC

Related research

Keywords: duopoly; imperfect competition; congestion; general equilibrium; airport competition;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
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.:
as in new window
  1. Jan K. Brueckner, 2002. "Airport Congestion When Carriers Have Market Power," American Economic Review, American Economic Association, American Economic Association, vol. 92(5), pages 1357-1375, December.
  2. Barrett, Sean D., 2004. "How do the demands for airport services differ between full-service carriers and low-cost carriers?," Journal of Air Transport Management, Elsevier, Elsevier, vol. 10(1), pages 33-39.
  3. Van Dender, Kurt, 2005. "Duopoly Prices Under Congested Access," University of California Transportation Center, Working Papers qt7xw8c3fn, University of California Transportation Center.
  4. Fujita,Masahisa & Thisse,Jacques-François, 2013. "Economics of Agglomeration," Cambridge Books, Cambridge University Press, Cambridge University Press, number 9781107001411.
  5. Thorsten Fischer & David R. Kamerschen, 2003. "Price-Cost Margins in the US Airline Industry using a Conjectural Variation Approach," Journal of Transport Economics and Policy, London School of Economics and University of Bath, London School of Economics and University of Bath, vol. 37(2), pages 227-259, May.
  6. Luca Lambertini, 1994. "Optimal Fiscal Regime in a Spatial Duopoly," Working Papers 205, Dipartimento Scienze Economiche, Universita' di Bologna.
  7. Pels, Eric & Verhoef, Erik T., 2004. "The economics of airport congestion pricing," Journal of Urban Economics, Elsevier, vol. 55(2), pages 257-277, March.
  8. Hess, Stephane & Polak, John W., 2005. "Mixed logit modelling of airport choice in multi-airport regions," Journal of Air Transport Management, Elsevier, Elsevier, vol. 11(2), pages 59-68.
  9. Kurt Van Dender, 2005. "Duopoly prices under congested access," Journal of Regional Science, Wiley Blackwell, Wiley Blackwell, vol. 45(2), pages 343-362.
  10. Pels, Eric & Nijkamp, Peter & Rietveld, Piet, 2003. "Access to and competition between airports: a case study for the San Francisco Bay area," Transportation Research Part A: Policy and Practice, Elsevier, Elsevier, vol. 37(1), pages 71-83, January.
  11. Zhang, Anming & Zhang, Yimin, 1997. "Concession revenue and optimal airport pricing," Transportation Research Part E: Logistics and Transportation Review, Elsevier, Elsevier, vol. 33(4), pages 287-296, December.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. de Palma, André & Proost, Stef & van der Loo, Saskia, 2010. "Assessing transport investments - Towards a multi-purpose tool," Transportation Research Part B: Methodological, Elsevier, Elsevier, vol. 44(7), pages 834-849, August.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:ema:worpap:2007-14. See general 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: (Marion Oury).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.