IDEAS home Printed from https://ideas.repec.org/p/tin/wpaper/20030009.html

Competing Transport Networks

Author

Listed:
  • Marco J. van der Leij

    (Faculty of Economics, Erasmus University Rotterdam)

Abstract

In a circular city model, I consider network design and pricing decisions for asingle fast transport connection that faces competition from a slower but betteraccessible transport mode. To access the fast transport network individuals haveto make complementary trips by slow mode. This fact has interesting implicationson the location decisions. I show that in the presence of competition the profit-maximizingand socially optimal decision would be to cluster the two stations. Bycontrast, in the absence of competition both a profit-maximizing firm and a socialplanner would locate the two stations on opposite sides of the circle.

Suggested Citation

  • Marco J. van der Leij, 2003. "Competing Transport Networks," Tinbergen Institute Discussion Papers 03-009/1, Tinbergen Institute.
    • Handle: RePEc:tin:wpaper:20030009
    as

    Download full text from publisher

    File URL: https://papers.tinbergen.nl/03009.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Severin Borenstein, 1989. "Hubs and High Fares: Dominance and Market Power in the U.S. Airline Industry," RAND Journal of Economics, The RAND Corporation, vol. 20(3), pages 344-365, Autumn.
    2. C. D. Hyson & W. P. Hyson, 1950. "The Economic Law of Market Areas," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 64(2), pages 319-327.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Britta Hoyer & Kris De Jaegher, 2016. "Strategic Network Disruption and Defense," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 18(5), pages 802-830, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Claudio A Agostini & Diego Inostroza & Manuel Willington, 2012. "Price Effects and Switching Costs of Airlines Frequent Flyer Programs," Working Papers wp_023, Adolfo Ibáñez University, School of Government.
    2. Morlotti, Chiara & Redondi, Renato, 2023. "The impact of COVID-19 on airlines’ price curves," Journal of Air Transport Management, Elsevier, vol. 107(C).
    3. Fabio Panetta & Fabiano Schivardi & Matthew Shum, 2009. "Do Mergers Improve Information? Evidence from the Loan Market," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 41(4), pages 673-709, June.
    4. Fageda, Xavier, 2014. "What hurts the dominant airlines at hub airports?," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 70(C), pages 177-189.
    5. Maria José Gil-Moltó & Claudio A. Piga, 2007. "Entry and Exit in a Liberalised Market," Rivista di Politica Economica, SIPI Spa, vol. 97(1), pages 3-38, January-F.
    6. Borenstein, Severin & Netz, Janet, 1999. "Why do all the flights leave at 8 am?: Competition and departure-time differentiation in airline markets," International Journal of Industrial Organization, Elsevier, vol. 17(5), pages 611-640, July.
    7. Wu, Xiangru & Wang, Kun & Fu, Xiaowen & Dong, Kangyin & Sun, Xiaoqian & Hoon Oum, Tae, 2025. "How does COVID-19 pandemic affect airline’s route choice and market contact? − Full-service carriers vs. low-cost carriers in China," Transportation Research Part A: Policy and Practice, Elsevier, vol. 191(C).
    8. Craig Depken, 1999. "Free-Agency and the Competitiveness of Major League Baseball," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 14(3), pages 205-217, May.
    9. Christiaan Behrens & Nathalie McCaughey, 2015. "Loyalty Programs and Consumer Behaviour: The Impact of FFPs on Consumer Surplus," Tinbergen Institute Discussion Papers 15-048/VIII, Tinbergen Institute.
    10. Gayle, Philip G. & Wu, Chi-Yin, 2013. "A re-examination of incumbents’ response to the threat of entry: Evidence from the airline industry," Economics of Transportation, Elsevier, vol. 2(4), pages 119-130.
    11. Bergantino, Angela Stefania & Capozza, Claudia, 2014. "One price for all? The role of market captivity as a price discrimination device: evidence from the Italia city-pair markets," Working Papers 1401, SIET Società Italiana di Economia dei Trasporti e della Logistica.
    12. Sengupta Anirban & Wiggins Steven N., 2012. "Comparing Price Dispersion on and off the Internet Using Airline Transaction Data," Review of Network Economics, De Gruyter, vol. 11(1), pages 1-38, March.
    13. Kerry M. Tan, 2018. "Outsourcing and Price Competition: An Empirical Analysis of the Partnerships Between Legacy Carriers and Regional Airlines," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 53(2), pages 275-294, September.
    14. Wang, Kun & Xia, Wenyi & Zhang, Anming & Zhang, Qiong, 2018. "Effects of train speed on airline demand and price: Theory and empirical evidence from a natural experiment," Transportation Research Part B: Methodological, Elsevier, vol. 114(C), pages 99-130.
    15. Marco Alderighi & Marcella Nicolini & Claudio A. Piga, 2012. "Combined Effects of Load Factors and Booking Time on Fares: Insights from the Yield Management of a Low-Cost Airline," Quaderni di Dipartimento 171, University of Pavia, Department of Economics and Quantitative Methods.
    16. Yimga, Jules, 2024. "The on-time performance effects of a policy change in airport slot restrictions: A synthetic control analysis," Economics of Transportation, Elsevier, vol. 38(C).
    17. Alexandros M. Goulielmos, 2018. "“After End-2008 Structural Changes in Containership Market” and Their Impact on Industry’s Policy," IJFS, MDPI, vol. 6(4), pages 1-21, November.
    18. Fukui, Hideki, 2019. "How do slot restrictions affect airfares? New evidence from the US airline industry," Economics of Transportation, Elsevier, vol. 17(C), pages 51-71.
    19. Angela Stefania Bergantino & Claudia Capozza, 2015. "Airline Pricing Behavior Under Limited Inter-Modal Competition," Economic Inquiry, Western Economic Association International, vol. 53(1), pages 700-713, 01.
    20. Angela S. Bergantino & Claudia Capozza & Mauro Capurso, 2018. "Pricing strategies: who leads and who follows in the air and rail passenger markets in Italy," Applied Economics, Taylor & Francis Journals, vol. 50(46), pages 4937-4953, October.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • L91 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Transportation: General
    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tin:wpaper:20030009. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Tinbergen Office +31 (0)10-4088900 (email available below). General contact details of provider: https://edirc.repec.org/data/tinbenl.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.