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Entry in liberalized railway markets: The German experience

  • Rafael Lalive

    ()

    (HEC Lausanne, University of Lausanne)

  • Armin Schmutzler

    ()

    (Socioeconomic Institute, University of Zurich)

In Germany, competitive franchising is increasingly being used to procure passenger railway services that were previously provided by a state monopolist. This paper analyzes the 77 tenders that have taken place since the railway reform in 1994. The tenders differ with respect to the size of the franchise network, the required frequency of service, the duration of the contract and the proximity to other lines that are already run by competitors of DB Regio, a subsidiary of the successor of the former state monopolist. Our analysis shows that larger networks are less likely to be won by the competitors. Also, more recent auctions have been won by competitors more frequently than earlier auctions. Other control variables such as the duration of the contract and the adjacency to other lines run by entrants are insignificant.

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File URL: http://www.soi.uzh.ch/research/wp/2006/wp0609.pdf
File Function: revised version, 2007
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Paper provided by Socioeconomic Institute - University of Zurich in its series SOI - Working Papers with number 0609.

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Length: 20 pages
Date of creation: Nov 2006
Date of revision: Apr 2007
Publication status: published in Review of Network Economics, 7(1), pp. 37-52, 2008
Handle: RePEc:soz:wpaper:0609
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  1. repec:att:wimass:9123 is not listed on IDEAS
  2. Yeon-Koo Che, 1993. "Design Competition through Multidimensional Auctions," RAND Journal of Economics, The RAND Corporation, vol. 24(4), pages 668-680, Winter.
  3. Lalive, Rafael & Schmutzler, Armin, 2005. "Competition for Railway Markets: The Case of Baden-Württemberg," CEPR Discussion Papers 5396, C.E.P.R. Discussion Papers.
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