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Who should not share? The merits of withholding unused vehicles

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  • Roman Zakharenko

Abstract

People repeatedly demand travel, using available vehicles scattered around space. What can justify vehicle withholding (i.e. preventing others from using it, for own future use) from the social welfare perspective? This paper investigates heterogeneity in the potential cost of search for alternative vehicles as such justification. It is shown that travellers whose search cost is substantially higher than that of others (e.g. limited-mobility people) can optimally withhold a vehicle. The heterogeneity of search costs should be sufficiently strong, e.g. a uniform distribution is not variable enough to justify withholding by anyone. In an example calibrated for car use in London, it is shown that at most 39% of car users should withhold their vehicles under the most extreme modelling assumptions, while all others should share.

Suggested Citation

  • Roman Zakharenko, 2024. "Who should not share? The merits of withholding unused vehicles," Working Papers 2024_07, Business School - Economics, University of Glasgow.
    • Handle: RePEc:gla:glaewp:2024_07
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    References listed on IDEAS

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    1. Nicholas Buchholz, 2022. "Spatial Equilibrium, Search Frictions, and Dynamic Efficiency in the Taxi Industry," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 89(2), pages 556-591.
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    More about this item

    Keywords

    Vehicle sharing; Transportation demand; Spatial search frictions;
    All these keywords.

    JEL classification:

    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R40 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - General

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