Service Provision on a Railway Network: An Experiment
AbstractInspired by the ongoing debate regarding the liberalization of the Spanish railway network, we use real-world information on the features of passenger transportation demand and the existing network infrastructure to build a complex experimental setting. We test the efficiency of alternative service provision obligations imposed to railway companies. Our results show that imposing a minimum service for less profitable connections not only improves consumer and overall welfare but will not harm the companies, because it enhances connectivity and the overall demand on the network. In the absence of such service provision restrictions, the companies failing to recognize the profitability of creating a complete network leave some connections unserved, thus reducing overall demand for passenger services.
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Bibliographic InfoPaper provided by NET Institute in its series Working Papers with number 12-14.
Length: 45 pages
Date of creation: Sep 2012
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Web page: http://www.NETinst.org/
Transportation sector; Railway network; Experimental Economics;
Find related papers by JEL classification:
- C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
- L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
- L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
- L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-10-13 (All new papers)
- NEP-EXP-2012-10-13 (Experimental Economics)
- NEP-REG-2012-10-13 (Regulation)
- NEP-TRE-2012-10-13 (Transport Economics)
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