Price Competition in the Intercity Passenger Transport Market: A Simulation Model
We elaborate a simulation model to analyse inter- and intra-modal competition in the transport industry, based on game theory models. In this game, consumers choose a transport mode and an operator to travel on a given city-pair; operators strategically decide on prices for the services they provide. We derive the market equilibrium and simulate potential regulatory and structural scenarios. Hence, our framework is a tool to measure the effectiveness of competition on a relevant market, to design marketing strategies or to evaluate the net benefit of new transport infrastructures. It can be effectively used with a limited set of detailed data. © 2008 LSE and the University of Bath
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- Berry, Steven & Levinsohn, James & Pakes, Ariel, 1995. "Automobile Prices in Market Equilibrium," Econometrica, Econometric Society, vol. 63(4), pages 841-90, July.
- David Besanko & Sachin Gupta & Dipak Jain, 1998. "Logit Demand Estimation Under Competitive Pricing Behavior: An Equilibrium Framework," Management Science, INFORMS, vol. 44(11-Part-1), pages 1533-1547, November.
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