Market structure, countervailing power and price discrimination: the case of airports
A number of interesting policy questions have arisen regarding airport landing fees. For example, what is the impact of joint ownership of airports? Does airline countervailing power stop airports raising fees? Should airports be prohibited, as an EU directive intends, from charging differential input prices to airlines? We set out a model of upstream airports and downstream airlines with varying countervailing power and pricing structures. Our major findings are: (a) an increase in upstream concentration or in the degree of differentiation between airports always increases the landing fee; (b) the effect of countervailing power, via an increase in downstream concentration, lowers landing fees, but typically does not pass through to consumers; (c) with Cournot competition, uniform landing fees are always higher than discriminatory fees.
(This abstract was borrowed from another version of this item.)
|Date of creation:||01 Mar 2013|
|Date of revision:|
|Contact details of provider:|| Postal: South Kensington campus, London SW7 2AZ|
Phone: +44 (0)20 7594 9137
Fax: +44 (0)20 7823 7685
Web page: http://www.imperial.ac.uk/business-school
More information through EDIRC
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.:
- Valletti, T & Iozzi, A, 2014.
"Vertical bargaining and countervailing power,"
5958, Imperial College, London, Imperial College Business School.
- Barrett, Sean D, 2000. "Airport competition in the deregulated European aviation market," Journal of Air Transport Management, Elsevier, vol. 6(1), pages 13-27.
- Pels, Eric & Verhoef, Erik T., 2004.
"The economics of airport congestion pricing,"
Journal of Urban Economics,
Elsevier, vol. 55(2), pages 257-277, March.
- Starkie, David, 2002. "Airport regulation and competition," Journal of Air Transport Management, Elsevier, vol. 8(1), pages 63-72.
- Dobson, Paul W & Waterson, Michael, 1997. "Countervailing Power and Consumer Prices," Economic Journal, Royal Economic Society, vol. 107(441), pages 418-30, March.
- Clifford Winston, 2009. "Lessons from the U.S. Transport Deregulation Experience for Privatization," OECD/ITF Joint Transport Research Centre Discussion Papers 2009/20, OECD Publishing.
- Dobson, Paul W. & Waterson, Michael, 2007. "The competition effects of industry-wide vertical price fixing in bilateral oligopoly," International Journal of Industrial Organization, Elsevier, vol. 25(5), pages 935-962, October.
- De Borger, Bruno & Van Dender, Kurt, 2006. "Prices, capacities and service levels in a congestible Bertrand duopoly," Journal of Urban Economics, Elsevier, vol. 60(2), pages 264-283, September.
When requesting a correction, please mention this item's handle: RePEc:imp:wpaper:6857. 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: (Dr David A Wilson)
If references are entirely missing, you can add them using this form.