Airport Congestion When Carriers Have Market Power
This paper analyzes airport congestion when carriers are nonatomistic, showing how the results of the road-pricing literature are modified when the economic agents causing congestion have market power. The analysis shows that when an airport is dominated by a monopolist, congestion is fully internalized, yielding no role for congestion pricing under monopoly conditions. Under a Cournot oligopoly, however, carriers are shown to internalize only the congestion they impose on themselves. A toll that captures the uninternalized portion of congestion may then improve the allocation of traffic. The analysis is supported by some rudimentary empirical evidence.
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Volume (Year): 92 (2002)
Issue (Month): 5 (December)
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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.:
- Christopher Mayer & Todd Sinai, "undated".
"Network Effects, Congestion Externalities, and Air Traffic Delays: Or Why All Delays Are Not Evil,"
Zell/Lurie Center Working Papers
393, Wharton School Samuel Zell and Robert Lurie Real Estate Center, University of Pennsylvania.
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