DP5004 Intermodal and Intramodal Competition in Passenger Rail Transport
|Author(s):||Marc Ivaldi, Catherine Vibes|
|Publication Date:||April 2005|
|Keyword(s):||product differentiation, relevant transport market, simulation model|
|JEL(s):||C35, C81, L11, L13, L92, L93, L98|
|Programme Areas:||Industrial Organization|
|Link to this Page:||www.cepr.org/active/publications/discussion_papers/dp.php?dpno=5004|
The objective of the paper is to elaborate a simulation model to analyse inter and intra-modal competition in the transport industry, based on game theory models. In our setting, consumers choose a transport mode and an operator to travel on a given city-pair; operators strategically decide on prices for the types of service they provide. We derive the market equilibrium and simulate potential scenarios. In particular we measure the impact of entry by a low cost train operator and the effect of a kerosene tax. Hence our framework could serve as a tool to measure the effectiveness of competition on a relevant market or to design marketing strategies. More generally it can be applied in cases of oligopolistic competition when detailed data are not available.