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Title: Effect of imperfect competition on infrastructure charges
Authors: Meunier, David
Quinet, Emile
Keywords: Imperfect competitionTransport infrastructureRailHigh speed trainLerner indexPricing behaviour
Issue Date: 2009
Publisher: EUT Edizioni Università di Trieste
Source: Meunier, D., Quinet, E. (2009) “Effect of imperfect competition on infrastructure charges”, European Transport \ Trasporti Europei, (43) pp. 113-136
Series/Report no.: European Transport / Trasporti Europei
The text explores the optimal infrastructure charges of an unbundled activity where the infrastructure
manager sells the use of the infrastructure to operators providing services to a downstream market made
up of atomistic customers. This situation has been widely analysed under the assumption that the
upstream market is competitive, but more rarely in the case of imperfect competition. Typical examples
are the railways activity in Europe and air transport. Various market structures are considered, illustrated
by situations encountered in the transport field: a single mode operated by a single operator, two operators
competing within the same mode, and two modes competing in a Bertrand way. In each case, situations
are analysed using analytic formulae with a simplified demand function and a simplified cost function,
and performing simulations with sensible parameter values drawn from current average situations. The
main result is that the analysed imperfections make a dramatic departure from the conventional Marginal
Cost pricing doctrine. Conclusions are drawn regarding infrastructure charging policy.
Type: Article
ISSN: 1825-3997
Appears in Collections:European Transport / Trasporti Europei (2009) 43/XV

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