Competing Transport Networks

Tinbergen Institute Discussion Paper No. 2003-009/1

23 Pages Posted: 24 May 2003

See all articles by Marco van der Leij

Marco van der Leij

CeNDEF, University of Amsterdam; Tinbergen Institute; De Nederlandsche Bank - Research Department

Date Written: January 2003

Abstract

In a circular city model, I consider network design and pricing decisions for a single fast transport connection that faces competition from a slower but better accessible transport mode. To access the fast transport network individuals have to make complementary trips by slow mode. This fact has interesting implications on the location decisions. I show that in the presence of competition the profit-maximizing and socially optimal decision would be to cluster the two stations. By contrast, in the absence of competition both a profit-maximizing firm and a social planner would locate the two stations on opposite sides of the circle.

Keywords: Networks, Transportation, Competition, Market area, Circular city

JEL Classification: L91, D40.

Suggested Citation

van der Leij, Marco Juri, Competing Transport Networks (January 2003). Tinbergen Institute Discussion Paper No. 2003-009/1. Available at SSRN: https://ssrn.com/abstract=382284 or http://dx.doi.org/10.2139/ssrn.382284

Marco Juri van der Leij (Contact Author)

CeNDEF, University of Amsterdam ( email )

Roetersstraat 11
Amsterdam, NL-1018WB
Netherlands
+31 20 525 7356 (Phone)

HOME PAGE: http://home.staff.uva.nl/m.j.vanderleij

Tinbergen Institute ( email )

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

De Nederlandsche Bank - Research Department ( email )

P.O. Box 98
1000 AB Amsterdam
Netherlands

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