Complementary Alliances with Endogenous Fleets and Load Factors

Tinbergen Institute Discussion Paper 15-134/VIII

30 Pages Posted: 20 Dec 2015 Last revised: 11 Apr 2016

See all articles by Achim Ingo Czerny

Achim Ingo Czerny

Vrije Universiteit Amsterdam, School of Business and Economics

Vincent A.C. van den Berg

VU University Amsterdam; Tinbergen Institute - Tinbergen Institute Amsterdam (TIA)

Erik T. Verhoef

VU University Amsterdam - Department of Spatial Economics; Vrije Universiteit Amsterdam, School of Business and Economics; Tinbergen Institute - Tinbergen Institute Amsterdam (TIA)

Date Written: January 3, 2016

Abstract

This paper analyzes the effect of carrier collaboration on fleet capacity, fleet structures in terms of the number and the size of vehicles, and load factors. The model features complementary networks, scheduling, price elastic demands, and demand uncertainty. For the case of a given number of vehicles, the analysis shows that carrier collaboration increases vehicle sizes (thus, fleet capacity) if marginal seat costs are low while fleet capacity remains unchanged if marginal seat costs are high. If both vehicle sizes and vehicle numbers can be varied, then collaboration will always increase vehicle numbers and fleet capacity, while the effects on vehicle sizes and, thus, also load factors, are ambiguous and therewith hard to predict. Numerical simulations indicate that collaboration increases expected load factors also when the number of vehicles is endogenous.

Keywords: Alliances, fleet capacity, load factors, scheduling, uncertainty

JEL Classification: L40, L50, M21, R42, R49

Suggested Citation

Czerny, Achim Ingo and van den Berg, Vincent A.C. and Verhoef, Erik T., Complementary Alliances with Endogenous Fleets and Load Factors (January 3, 2016). Tinbergen Institute Discussion Paper 15-134/VIII. Available at SSRN: https://ssrn.com/abstract=2705454 or http://dx.doi.org/10.2139/ssrn.2705454

Achim Ingo Czerny (Contact Author)

Vrije Universiteit Amsterdam, School of Business and Economics ( email )

De Boelelaan 1105
Amsterdam, 1081HV
Netherlands

Vincent A.C. van den Berg

VU University Amsterdam ( email )

De Boelelaan 1105
Amsterdam, ND North Holland 1081 HV
Netherlands

HOME PAGE: http://www.feweb.vu.nl/nl/afdelingen-en-instituten/spatial-economics/staff/v-berg/index.asp

Tinbergen Institute - Tinbergen Institute Amsterdam (TIA) ( email )

Gustav Mahlerplein 117
Amsterdam, 1082 MS
Netherlands

Erik T. Verhoef

VU University Amsterdam - Department of Spatial Economics ( email )

De Boelelaan 1105
1081HV Amsterdam
Netherlands
+31 020 4446094 (Phone)
+31 020 4446004 (Fax)

Vrije Universiteit Amsterdam, School of Business and Economics ( email )

De Boelelaan 1105
Amsterdam, 1081HV
Netherlands

Tinbergen Institute - Tinbergen Institute Amsterdam (TIA) ( email )

Gustav Mahlerplein 117
Amsterdam, 1082 MS
Netherlands

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