Maintenance, service quality and congestion pricing with competing roads
This paper studies maintenance and tolling decisions by two competing private operators of roads that experience depreciation and congestion. Duopoly generally results in higher social costs not only than in the first-best optimum but also the second-best optimum in which roads can be maintained but not tolled. Duopoly as a rule performs best when roads have equal capacities and intrinsic qualities so that market power is balanced. It also performs better when maintenance and tolling decisions are made simultaneously rather than sequentially because firms in the sequential game curtail maintenance in the first stage in order to soften toll competition in the second stage.
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Volume (Year): 41 (2007)
Issue (Month): 5 (June)
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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.:
- AndrÊ de Palma & Robin Lindsey, 2000. "Private toll roads: Competition under various ownership regimes," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 34(1), pages 13-35.
- Small, Kenneth A & Winston, Clifford, 1988. "Optimal Highway Durability," American Economic Review, American Economic Association, vol. 78(3), pages 560-69, June.
- Van Dender, Kurt, 2005. "Duopoly Prices Under Congested Access," University of California Transportation Center, Working Papers qt7xw8c3fn, University of California Transportation Center.
- Verhoef, Erik & Nijkamp, Peter & Rietveld, Piet, 1996. "Second-Best Congestion Pricing: The Case of an Untolled Alternative," Journal of Urban Economics, Elsevier, vol. 40(3), pages 279-302, November.
- Newbery, David M, 1988. "Road Damage Externalities and Road User Charges," Econometrica, Econometric Society, vol. 56(2), pages 295-316, March.
- repec:adr:anecst:y:1989:i:15-16:p:17 is not listed on IDEAS
- Kurt Van Dender, 2005. "Duopoly prices under congested access," Journal of Regional Science, Wiley Blackwell, vol. 45(2), pages 343-362.
- Bruno De Borger & Kurt Van Dender, 2005.
"Prices, capacities and service quality in a congestible Bertrand duopoly,"
ERSA conference papers
ersa05p221, European Regional Science Association.
- De Borger, Bruno & Van Dender, Kurt, 2005. "Prices, capacities and service quality in a congestible Bertrand duopoly," University of California Transportation Center, Working Papers qt1k51437c, University of California Transportation Center.
- Fudenberg, Drew & Tirole, Jean, 1984. "The Fat-Cat Effect, the Puppy-Dog Ploy, and the Lean and Hungry Look," American Economic Review, American Economic Association, vol. 74(2), pages 361-66, May.
- de Palma, Andre & Lindsey, Robin, 2002. "Private roads, competition, and incentives to adopt time-based congestion tolling," Journal of Urban Economics, Elsevier, vol. 52(2), pages 217-241, September.
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