Relationships between fares, trip length and market competition
This paper analyses equilibrium fares that arise from Collusion, Cournot, Stackelberg, Bertrand and Sequential Price Competition when two profit maximising transport firms produce symmetrically differentiable services and have identical costs. Special focus is placed on how different equilibrium fares are linked to trip length. Higher operator costs and higher demand from the authorities regarding the quality of transport supply result in steeper relationships (larger rate of change) between all fares and travel distance. Also, a higher degree of substitutability between the services will in most cases make these relationships steeper. The competitive situation has less influence on fares, both absolutely and relatively, the longer routes the operators compete on.
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.
Volume (Year): 45 (2011)
Issue (Month): 7 (August)
|Contact details of provider:|| Web page: http://www.elsevier.com/wps/find/journaldescription.cws_home/547/description#description|
|Order Information:|| Postal: http://www.elsevier.com/wps/find/supportfaq.cws_home/regional|
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.:
- Jørgensen, Finn & Pedersen, Pål Andreas, 2004. "Travel distance and optimal transport policy," Transportation Research Part B: Methodological, Elsevier, vol. 38(5), pages 415-430, June.
- Hensher, David A. & Stanley, John, 2003. "Performance-based quality contracts in bus service provision," Transportation Research Part A: Policy and Practice, Elsevier, vol. 37(6), pages 519-538, July.
- Finn Jørgensen & John Preston, 2007. "The Relationship Between Fare and Travel Distance," Journal of Transport Economics and Policy, London School of Economics and University of Bath, vol. 41(3), pages 451-468, September.
- Hackner, Jonas, 2000.
"A Note on Price and Quantity Competition in Differentiated Oligopolies,"
Journal of Economic Theory,
Elsevier, vol. 93(2), pages 233-239, August.
- Häckner, Jonas, 1999. "A Note on Price and Quantity Competition in Differentiated Oligopolies," Research Papers in Economics 1999:9, Stockholm University, Department of Economics.
- Nirvikar Singh & Xavier Vives, 1984. "Price and Quantity Competition in a Differentiated Duopoly," RAND Journal of Economics, The RAND Corporation, vol. 15(4), pages 546-554, Winter.
- Jørgensen, Finn & Pedersen, Hassa & Solvoll, Gisle, 2004. "Ramsey pricing in practice: the case of the Norwegian ferries," Transport Policy, Elsevier, vol. 11(3), pages 205-214, July.
- Helge Sanner, 2007. "Bertrand Competition Can Yield Higher Prices Than Monopoly," Bulletin of Economic Research, Wiley Blackwell, vol. 59(3), pages 247-254, 07.
- Derek J. Clark & Finn Jørgensen & Pål A. Pedersen, 2009. "Strategic Interactions between Transport Operators with Several Goals," Journal of Transport Economics and Policy, London School of Economics and University of Bath, vol. 43(3), pages 385-403, September.
- Salvanes, K.G. & Steen, F. & Sorgard, L., 1998.
"Collude, Compete, or Both? Deregulation in the Norwegian Airline Industry,"
18/98, Norwegian School of Economics and Business Administration-.
- Kjell G. Salvanes & Frode Steen & Lars Sørgard, 2003. "Collude, Compete, or Both? Deregulation in the Norwegian Airline Industry," Journal of Transport Economics and Policy, London School of Economics and University of Bath, vol. 37(3), pages 383-416, September.
- Banister, David & Berechman, Joseph & De Rus, Gines, 1992. "Competitive regimes within the European bus industry: Theory and practice," Transportation Research Part A: Policy and Practice, Elsevier, vol. 26(2), pages 167-178, March.
- Paulley, Neil & Balcombe, Richard & Mackett, Roger & Titheridge, Helena & Preston, John & Wardman, Mark & Shires, Jeremy & White, Peter, 2006. "The demand for public transport: The effects of fares, quality of service, income and car ownership," Transport Policy, Elsevier, vol. 13(4), pages 295-306, July.
- Nash, C A, 1993. "British Bus Deregulation," Economic Journal, Royal Economic Society, vol. 103(419), pages 1042-49, July.
When requesting a correction, please mention this item's handle: RePEc:eee:transa:v:45:y:2011:i:7:p:611-624. 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: (Zhang, Lei)
If references are entirely missing, you can add them using this form.