Striking Evidence: The Impact of Railway Strikes on Competition from Intercity Bus Services in Germany

Matthias Beestermöller, Levke Jessen-Thiesen, Alexander Sandkamp and Alexander-Nikolai Sandkamp

No 10483, CESifo Working Paper Series from CESifo

Abstract: This paper investigates the impact of the largest rail strikes in German history on intercity buses. Using unique booking data of bus services, we exploit variation in rail service cancellations across routes to show that the disruption in rail transport increases bus ticket sales. The effect persists beyond the strike, indicating that travellers do not return to their originally preferred mode of transport. It is particularly pronounced for passengers travelling on weekends. The findings suggest that customers were previously under-experimenting. From a policy perspective, our results highlight the need to incentivise experimentation to foster competition, facilitate transformative change and raise welfare.

Keywords: experimentation; inter-modal substitution; learning; optimisation; strike; switching costs; transport (search for similar items in EconPapers)
JEL-codes: D83 L92 R41 (search for similar items in EconPapers)
Date: 2023
New Economics Papers: this item is included in nep-com, nep-eur, nep-mfd, nep-reg, nep-tre and nep-ure
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Working Paper: Striking evidence: The impact of railway strikes on competition from intercity bus services in Germany (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_10483

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