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Intermodal competition on some routes in transportation networks: The case of inter urban buses and railways

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  • Bataille, Marc
  • Steinmetz, Alexander

Abstract

This paper analyzes the effect of inter urban buses competing on a few routes against trains within an established railway network. In line with expectations, we show that this can lead to unprofitable train service on these routes. However, within an established railway network with every track being profitable, competition on just some tracks can result in a collapse of the entire network. External effects of individual routes on the railway network are fundamental for the profitability of the network. Hence, weakening these network effects might be crucial. As a result, efficient intermodal competition on some routes might cause the abandoning of other routes that are not facing any competition. This effect has to be taken into account by political actors when liberalization of inter urban bus travel is considered.

Suggested Citation

  • Bataille, Marc & Steinmetz, Alexander, 2013. "Intermodal competition on some routes in transportation networks: The case of inter urban buses and railways," DICE Discussion Papers 84, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    • Handle: RePEc:zbw:dicedp:84
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Beestermöller, Matthias, 2017. "Striking Evidence? Demand Persistence for Inter-City Buses from German Railway Strikes," Discussion Papers in Economics 31768, University of Munich, Department of Economics.
    2. Samuel de Haas & Daniel Herold & Jan Thomas Schaefer, 2017. "Entry deterrence due to brand proliferation: Empirical evidence from the German interurban bus industry," MAGKS Papers on Economics 201731, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    3. Florent Laroche & Ayana Lamatkhanova, 2020. "Effects of open access competition on prices and frequencies on the interurban railway market: evidence from Europe," Working Papers halshs-02930864, HAL.
    4. Florent Laroche & Ayana Lamatkhanova, 2022. "Effects of open access competition on prices and frequencies on the interurban railway market: evidence from Europe," Post-Print halshs-02930864, HAL.
    5. Matthias Beestermöller & Levke Jessen-Thiesen & Alexander Sandkamp & Alexander-Nikolai Sandkamp, 2023. "Striking Evidence: The Impact of Railway Strikes on Competition from Intercity Bus Services in Germany," CESifo Working Paper Series 10483, CESifo.
    6. Bruno Carballa Smichowski, 2018. "Determinants of coopetition through data sharing in MaaS [Facteurs qui déterminent la coopétition via le partage de données dans MaaS]," Post-Print hal-01872063, HAL.
    7. Burgdorf, Christian & Eisenkopf, Alexander & Knorr, Andreas, 2018. "User acceptance of long distance bus services in Germany," Research in Transportation Economics, Elsevier, vol. 69(C), pages 270-283.
    8. Avenali, Alessandro & Gregori, Martina & Reverberi, Pierfrancesco, 2023. "Intercity bus and rail services: Competition and welfare effects," Transportation Research Part A: Policy and Practice, Elsevier, vol. 172(C).
    9. Burgdorf, Christian & Eisenkopf, Alexander, 2018. "Effects of road tolls for intercity buses on travel activities and the choice of means of transport in German long-distance passenger transport," Research in Transportation Economics, Elsevier, vol. 72(C), pages 92-105.
    10. McHardy, Jolian, 2024. "Platform business models and strategic price interaction," Transportation Research Part B: Methodological, Elsevier, vol. 182(C).
    11. de Haas, Samuel & Herold, Daniel & Schäfer, Jan Thomas, 2022. "Entry deterrence due to brand proliferation: Empirical evidence from the German interurban bus industry," International Journal of Industrial Organization, Elsevier, vol. 83(C).
    12. Fageda, Xavier & Sansano, Sergi, 2018. "Factors influencing prices and frequencies in the interurban bus market: Evidence from Europe," Transportation Research Part A: Policy and Practice, Elsevier, vol. 111(C), pages 266-276.
    13. Elena Koncheva & Nikolay Zalesskiy & Pavel Zuzin, 2015. "Optimization of Regional Public Transport System: The Case of Perm Krai," HSE Working papers WP BRP 01/URB/2015, National Research University Higher School of Economics.
    14. McHardy, Jolian & Reynolds, Michael & Trotter, Stephen, 2023. "A consumer surplus, welfare and profit enhancing strategy for improving urban public transport networks," Regional Science and Urban Economics, Elsevier, vol. 100(C).

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    More about this item

    Keywords

    Transportation; intermodal competition; network effects;
    All these keywords.

    JEL classification:

    • K2 - Law and Economics - - Regulation and Business Law
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L5 - Industrial Organization - - Regulation and Industrial Policy
    • R4 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics

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