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Priority Rules Versus Scarcity Premiums in Rail Markets

Author

Listed:
  • Achim I. Czerny
  • Kay Mitusch
  • Andreas Tanner

Abstract

The regulation of rail network access is a key component of the EU policy that aims to strengthen rail markets. Two specific regulations are proposed: (i) a priority for long-distance (freight) services and (ii) a scarcity premium. Based on a congested network with two rail links, numerical simulations demonstrate that total surplus can be greater under the priority rule, which depends on the network charge per train-kilometer. Consumer surplus, on the other hand, is always greater under the priority rule, while fixed network-cost recovery is easier to achieve if a scarcity premium exists.

Suggested Citation

  • Achim I. Czerny & Kay Mitusch & Andreas Tanner, 2010. "Priority Rules Versus Scarcity Premiums in Rail Markets," WHU Working Paper Series - Economics Group 10-03, WHU - Otto Beisheim School of Management.
    • Handle: RePEc:whu:wpaper:10-03
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    References listed on IDEAS

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    More about this item

    Keywords

    Rail markets; priority rules; scarcity premiums; congestion; network allocation;
    All these keywords.

    JEL classification:

    • D42 - Microeconomics - - Market Structure, Pricing, and Design - - - Monopoly
    • D45 - Microeconomics - - Market Structure, Pricing, and Design - - - Rationing; Licensing
    • L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy

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