Discussion paper

DP5004 Intermodal and Intramodal Competition in Passenger Rail Transport

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.

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Citation

Ivaldi, M and C Vibes (2005), ‘DP5004 Intermodal and Intramodal Competition in Passenger Rail Transport‘, CEPR Discussion Paper No. 5004. CEPR Press, Paris & London. https://cepr.org/publications/dp5004