A simple analysis of the rent seeking of airlines, airports and politicians
Economic rent seeking is the raison d'être of a commercial undertaking and acts as the manipulator of Adam Smith's 'invisible hand'. The retention of economic rent, however, can cause undesirable distortions, especially if it persists over a long period. Public policy, therefore, often seeks to tempt business with the promise of rent, allow business an occasional nibble, but at the same time create structures whereby business cannot swim away with the bait. The discussion here is of how slot allocation procedures have rent seeking implications that affect both the existence of economic rents and the distribution of these rents. The actors in the game are the airlines, airports and politicians (broadly defined to include the executive as well as legislators). The ultimate distribution of rent is essentially a political decision, as is any form of allocation, but its form is influenced by the underlying nature of the market for slots and the way in which market power is spread.
Volume (Year): 12 (2005)
Issue (Month): 1 (January)
|Contact details of provider:|| Web page: http://www.elsevier.com/wps/find/journaldescription.cws_home/30473/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.:
- Nicholas Economides, 1997.
"The Economics of Networks,"
Brazilian Electronic Journal of Economics,
Department of Economics, Universidade Federal de Pernambuco, vol. 1(0), December.
- Leibenstein, Harvey, 1979. "A Branch of Economics is Missing: Micro-Micro Theory," Journal of Economic Literature, American Economic Association, vol. 17(2), pages 477-502, June.
- Grether, David M & Isaac, R Mark & Plott, Charles R, 1981.
"The Allocation of Landing Rights by Unanimity among Competitors,"
American Economic Review,
American Economic Association, vol. 71(2), pages 166-71, May.
- Grether, David M. & Isaac, R. Mark & Plott, Charles R., . "The Allocation of Landing Rights by Unanimity among Competitors," Working Papers 350, California Institute of Technology, Division of the Humanities and Social Sciences.
- Turvey, Ralph, 1975. "A Simple Analysis of Optimal Fares on Scheduled Transport Services," Economic Journal, Royal Economic Society, vol. 85(337), pages 1-9, March.
- Golaszewski, Richard, 2004. "Location rents and the experience of US airportsâ€”lessons learned from off-airport entities," Journal of Air Transport Management, Elsevier, vol. 10(1), pages 61-69.
- Turner, Sheelah & Morrell, Peter, 2003. "An evaluation of airline beta values and their application in calculating the cost of equity capital," Journal of Air Transport Management, Elsevier, vol. 9(4), pages 201-209.
- Jan K. Brueckner, 2002. "Airport Congestion When Carriers Have Market Power," American Economic Review, American Economic Association, vol. 92(5), pages 1357-1375, December.
- Posner, Richard A, 1975. "The Social Costs of Monopoly and Regulation," Journal of Political Economy, University of Chicago Press, vol. 83(4), pages 807-27, August.
- S.J. Rassenti & V.L. Smith & R.L. Bulfin, 1982. "A Combinatorial Auction Mechanism for Airport Time Slot Allocation," Bell Journal of Economics, The RAND Corporation, vol. 13(2), pages 402-417, Autumn.
- Christopher Mayer & Todd Sinai, 2003. "Network Effects, Congestion Externalities, and Air Traffic Delays: Or Why Not All Delays Are Evil," American Economic Review, American Economic Association, vol. 93(4), pages 1194-1215, September.
- Shy,Oz, 2001.
"The Economics of Network Industries,"
Cambridge University Press, number 9780521800952, June.
- 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.
- F. H. Knight, 1924. "Some Fallacies in the Interpretation of Social Cost," The Quarterly Journal of Economics, Oxford University Press, vol. 38(4), pages 582-606.
- David Starkie, 2001. "Reforming UK Airport Regulation," Journal of Transport Economics and Policy, London School of Economics and University of Bath, vol. 35(1), pages 119-135, January.
- Forsyth, Peter, 2004. "Locational and monopoly rents at airports: creating them and shifting them," Journal of Air Transport Management, Elsevier, vol. 10(1), pages 51-60.
When requesting a correction, please mention this item's handle: RePEc:eee:trapol:v:12:y:2005:i:1:p:47-56. 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.