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Railroads and Price Discrimination: The Roles of Competition, Information, and Regulation

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  • James MacDonald

Abstract

I evaluate railroad price discrimination in three periods: 1870–1886, before the passage of the Interstate Commerce Act; 1945–1975, when rates were regulated but railroads faced extensive intermodal competition; and 1980–2010, after the passage of major regulatory reforms. While price discrimination was widespread in each period, the specific practices varied as the nature of competition, regulation, and the information available to decision-makers changed. The Act focused heavily on price discrimination, and limited some practices while encouraging others. One major weakness of the Act was the restrictions that were imposed on pricing practices that could lead to cost reductions and productivity improvements. Copyright Springer Science+Business Media New York (outside the USA) 2013

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  • James MacDonald, 2013. "Railroads and Price Discrimination: The Roles of Competition, Information, and Regulation," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 43(1), pages 85-101, August.
    • Handle: RePEc:kap:revind:v:43:y:2013:i:1:p:85-101
    DOI: 10.1007/s11151-013-9390-z
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    2. Jonathan E. Hughes & Ian Lange, 2020. "Who (Else) Benefits From Electricity Deregulation? Coal Prices, Natural Gas, And Price Discrimination," Economic Inquiry, Western Economic Association International, vol. 58(3), pages 1053-1075, July.
    3. Zheng, Han, 2022. "Price Discrimination in the Transport Industry and the Gains from Trade," Discussion paper series HIAS-E-123, Hitotsubashi Institute for Advanced Study, Hitotsubashi University.
    4. Nolan, James & Su, Chi & Pizzey, Logan & Peterson, Steven, 2020. "Parallel or converging? A comparative analysis of the grain and rail transportation systems in Canada and the United States," Miscellaneous Publications 307243, University of Saskatchewan, Department of Bioresource Policy Business and Economics.
    5. Massimo Geloso Grosso & Hildegunn Kyvik Nordås & Asako Ueno & Frédéric Gonzales & Iza Lejárraga & Sébastien Miroudot & Dorothée Rouzet, 2014. "Services Trade Restrictiveness Index (STRI): Transport and Courier Services," OECD Trade Policy Papers 176, OECD Publishing.
    6. Richards, Timothy J. & Rutledge, Zachariah, 2023. "COVID-19, Truck Rates, and Trucking Shortages," 2023 Annual Meeting, July 23-25, Washington D.C. 335435, Agricultural and Applied Economics Association.
    7. Zheng, Han, 2021. "Price Discrimination in the Transport Industry and the Gains from Trade," Discussion paper series HIAS-E-113, Hitotsubashi Institute for Advanced Study, Hitotsubashi University.
    8. Richard L. Schmalensee & Wesley W. Wilson, 2016. "Modernizing U.S. Freight Rail Regulation," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 49(2), pages 133-159, September.

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