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Measuring Competition Intensity; An Application to Air/HSR Transport Markets

Author

Listed:
  • Christiaan Behrens

    (VU University Amsterdam)

  • Mark Leijsen

    (VU University Amsterdam)

Abstract

We develop a method to measure the intensity of competition between firms. Our method, which we call the Best Response Measure (BRM), is related to the conduct parameter method, but avoids the main problems associated with that method. The BRM relies on a very general framework and limited data requirements. Moreover, we show that it provides valuable information in determining the relevant market. We illustrate how the BRM can be used in markets with imperfect substitutes and apply the method to aviation markets in the North Sea area. This also enables us to establish to what extent the high speed rail link between London and the European mainland affects the supply by air carriers.

Suggested Citation

  • Christiaan Behrens & Mark Leijsen, 2015. "Measuring Competition Intensity; An Application to Air/HSR Transport Markets," Tinbergen Institute Discussion Papers 15-075/VIII, Tinbergen Institute.
    • Handle: RePEc:tin:wpaper:20150075
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    References listed on IDEAS

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    Cited by:

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    2. Mantin, Benny & Gillen, David & Delibasi, Tuba Toru, 2024. "Measuring the impact of scheduling overlap and market structure on prices: Evidence from the airline industry," Transportation Research Part A: Policy and Practice, Elsevier, vol. 183(C).

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    More about this item

    Keywords

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    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise

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