Intermodal competition on some routes in transportation networks: The case of inter urban buses and railways
AbstractThis paper analyzes the effect of inter urban buses competing on a few routes against trains within an established railway network. In line with expectations, we show that this can lead to unprofitable train service on these routes. However, within an established railway network with every track being profitable, competition on just some tracks can result in a collapse of the entire network. External effects of individual routes on the railway network are fundamental for the profitability of the network. Hence, weakening these network effects might be crucial. As a result, efficient intermodal competition on some routes might cause the abandoning of other routes that are not facing any competition. This effect has to be taken into account by political actors when liberalization of inter urban bus travel is considered. --
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Bibliographic InfoPaper provided by Heinrich‐Heine‐Universität Düsseldorf, Düsseldorf Institute for Competition Economics (DICE) in its series DICE Discussion Papers with number 84.
Date of creation: 2013
Date of revision:
Transportation; intermodal competition; network effects;
Find related papers by JEL classification:
- K2 - Law and Economics - - Regulation and Business Law
- L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
- L5 - Industrial Organization - - Regulation and Industrial Policy
- R4 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-02-03 (All new papers)
- NEP-COM-2013-02-03 (Industrial Competition)
- NEP-HME-2013-02-03 (Heterodox Microeconomics)
- NEP-LAW-2013-02-03 (Law & Economics)
- NEP-NET-2013-02-03 (Network Economics)
- NEP-REG-2013-02-03 (Regulation)
- NEP-TRE-2013-02-03 (Transport Economics)
- NEP-URE-2013-02-03 (Urban & Real Estate Economics)
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