Airport Privatization and International Competition

18 Pages Posted: 17 Sep 2010  

Toshihiro Matsumura

University of Tokyo - Institute of Social Science

Noriaki Matsushima

Osaka University - Institute of Social and Economic Research (ISER)

Multiple version iconThere are 2 versions of this paper

Date Written: September 11, 2010

Abstract

We provide a simple theoretical model to explain the mechanism whereby privatization of international airports can improve welfare. The model consists of a downstream (airline) duopoly with two inputs (landings at two airports) and two types of consumers. The airline companies compete internationally. Using the simple international duopoly model, we show that the outcome where both airports are privatized is always an equilibrium while that where no airport is privatized is another equilibrium only if the degree of product differentiation is large.

Keywords: Airline, Airport, Privatization, International competition, Vertica lrelations

JEL Classification: L33, L13, R48

Suggested Citation

Matsumura, Toshihiro and Matsushima, Noriaki, Airport Privatization and International Competition (September 11, 2010). ISER Discussion Paper No. 792. Available at SSRN: https://ssrn.com/abstract=1677720 or http://dx.doi.org/10.2139/ssrn.1677720

Toshihiro Matsumura

University of Tokyo - Institute of Social Science ( email )

Hongo 7-3-1
Tokyo, TOKYO 113-0033
Japan

Noriaki Matsushima (Contact Author)

Osaka University - Institute of Social and Economic Research (ISER) ( email )

6-1 Mihogaoka
Ibaraki, Osaka 567-0047
Japan

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