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Title: Intermodal and Intramodal Competition in Passenger Rail Transport

Author(s): Marc Ivaldi and Catherine Vibes

Publication Date: April 2005

Keyword(s): product differentiation, relevant transport market and simulation model

Programme Area(s): Industrial Organization

Abstract: 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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Bibliographic Reference

Ivaldi, M and Vibes, C. 2005. 'Intermodal and Intramodal Competition in Passenger Rail Transport'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=5004