Atomistic congestion tolls at concentrated airports? Seeking a unified view in the internalization debate
The goal of this paper is to bring some unity to the theoretical side of the debate on internalization of airport congestion by showing that all the literature's theoretical results can be derived within one simple and unified framework. The analysis starts by replicating the results of Brueckner [Brueckner, J.K., 2002. Airport congestion when carriers have market power. American Economic Review 92, 1357-1375], who showed that, because airlines behaving in Cournot fashion internalize congestion, they should be charged low congestion tolls. The analysis then validates the findings of Daniel [Daniel, J.I., 1995. Congestion pricing and capacity of large hub airports: A bottleneck model with stochastic queues. Econometrica 63, 327-370], who argued that larger atomistic tolls are required in a model where a Stackelberg leader interacts with competitive fringe airlines. However, it is shown that this result only holds approximately when the carriers' outputs are imperfect substitutes.
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.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
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.:
- Pels, Eric & Verhoef, Erik T., 2004.
"The economics of airport congestion pricing,"
Journal of Urban Economics,
Elsevier, vol. 55(2), pages 257-277, March.
- Jan K. Brueckner, 2002. "Airport Congestion When Carriers Have Market Power," American Economic Review, American Economic Association, vol. 92(5), pages 1357-1375, December.
- Christopher Mayer & Todd Sinai, .
"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.
- Christopher Mayer & Todd Sinai, 2002. "Network Effects, Congestion Externalities, and Air Traffic Delays: Or Why All Delays Are Not Evil," NBER Working Papers 8701, National Bureau of Economic Research, Inc.
- Jan K. Brueckner, 2002.
"Internalization of Airport Congestion: A Network Analysis,"
CESifo Working Paper Series
756, CESifo Group Munich.
- Brueckner, Jan K., 2005. "Internalization of airport congestion: A network analysis," International Journal of Industrial Organization, Elsevier, vol. 23(7-8), pages 599-614, September.
- Daniel, Joseph I. & Pahwa, Munish, 2000. "Comparison of Three Empirical Models of Airport Congestion Pricing," Journal of Urban Economics, Elsevier, vol. 47(1), pages 1-38, January.
- Daniel, Joseph I., 2001. "Distributional Consequences of Airport Congestion Pricing," Journal of Urban Economics, Elsevier, vol. 50(2), pages 230-258, September.
- Daniel, Joseph I. & Harback, Katherine Thomas, 2008.
"(When) Do hub airlines internalize their self-imposed congestion delays?,"
Journal of Urban Economics,
Elsevier, vol. 63(2), pages 583-612, March.
- Joseph I. Daniel & Katherine Thomas Harback, 2005. "(When) Do Hub Airlines Internalize Their Self-Imposed Congestion Delays?," Working Papers 05-08, University of Delaware, Department of Economics.
- Forbes, Silke J., 2008. "The effect of air traffic delays on airline prices," International Journal of Industrial Organization, Elsevier, vol. 26(5), pages 1218-1232, September.
- Daniel, Joseph I, 1995. "Congestion Pricing and Capacity of Large Hub Airports: A Bottleneck Model with Stochastic Queues," Econometrica, Econometric Society, vol. 63(2), pages 327-70, March.
- Steven A. Morrison & Clifford Winston, 2007. "Another Look at Airport Congestion Pricing," American Economic Review, American Economic Association, vol. 97(5), pages 1970-1977, December.
- Basso, Leonardo J. & Zhang, Anming, 2007. "Congestible facility rivalry in vertical structures," Journal of Urban Economics, Elsevier, vol. 61(2), pages 218-237, March.
- Zhang, Anming & Zhang, Yimin, 2006. "Airport capacity and congestion when carriers have market power," Journal of Urban Economics, Elsevier, vol. 60(2), pages 229-247, September.
When requesting a correction, please mention this item's handle: RePEc:eee:juecon:v:64:y:2008:i:2:p:288-295. 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: (Shamier, Wendy)
If references are entirely missing, you can add them using this form.