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Garage and Curbside Parking Competition with Search Congestion

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Listed:
  • Eren Inci
  • Robin Lindsey

Abstract

In many downtown areas, privately operated parking garages compete with each other and with publicly operated curbside parking. Garages exercise market power by charging fees that vary with parking duration. Curbside space is scarce, and drivers have to search for it. This creates a congestion externality and enhances garages' market power. We show that with inelastic parking demand setting differentiated hourly curbside parking fees can support the social optimum without regulating garage fees. Second-best uniform curbside fees can also perform well. In general, first-best and second-best parking fees are sensitive to parking supply and demand conditions, and therefore should be tailored to local circumstances.

Suggested Citation

  • Eren Inci & Robin Lindsey, 2014. "Garage and Curbside Parking Competition with Search Congestion," ERSA conference papers ersa14p344, European Regional Science Association.
    • Handle: RePEc:wiw:wiwrsa:ersa14p344
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    endogenous outside option; parking; price discrimination; search costs; spatial competition;
    All these keywords.

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy

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