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Service Provision on a Railway Network: An Experiment

Author

Listed:
  • Aurora Garcia-Gallego

    (Laboratorio de Economia Experimental and Economics Department, Universitat Jaume I)

  • Nikolaos Georgantzis

    (Laboratorio de Economia Experimental, Universitat Jaume I and Economics Department, Universidad de Granada)

  • Gerardo Sabater-Grande

    (Laboratorio de Economia Experimental and Economics Department, Universitat Jaume I)

Abstract

Inspired by the ongoing debate regarding the liberalization of the Spanish railway network, we use real-world information on the features of passenger transportation demand and the existing network infrastructure to build a complex experimental setting. We test the efficiency of alternative service provision obligations imposed to railway companies. Our results show that imposing a minimum service for less profitable connections not only improves consumer and overall welfare but will not harm the companies, because it enhances connectivity and the overall demand on the network. In the absence of such service provision restrictions, the companies failing to recognize the profitability of creating a complete network leave some connections unserved, thus reducing overall demand for passenger services.

Suggested Citation

  • Aurora Garcia-Gallego & Nikolaos Georgantzis & Gerardo Sabater-Grande, 2012. "Service Provision on a Railway Network: An Experiment," Working Papers 12-14, NET Institute.
    • Handle: RePEc:net:wpaper:1214
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    File URL: http://www.netinst.org/Georgantzis_12-14.pdf
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    More about this item

    Keywords

    Transportation sector; Railway network; Experimental Economics;
    All these keywords.

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation

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