Competition in the railway passenger market: The challenge of liberalization

Carlos Gutiérrez-Hita and Aurora Ruiz-Rua
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Carlos Gutiérrez-Hita: Universidad Miguel Hernandez de Elche, Universidad Antonio de Nebrija, Spain
Aurora Ruiz-Rua: Universidad Antonio de Nebrija, Spain

Competition and Regulation in Network Industries, 2019, vol. 20, issue 2, 164-183

Abstract: European country members have been opening up to competition railway passenger services in recent years, whereas others still remain on the way to liberalization. The recent Commission’s fourth European Union (EU) Railway Package has updated the European legislation to ensure an effective liberalization within the EU country members by 2020. It is intended to enhance firms’ efficiency and also consumers’ benefits. In this article, we study different paths towards liberalization from the traditional state-owned monopoly configuration. First, the monopoly outcome is presented, as it is the current situation in a number of EU country members. Second, the oligopoly models are introduced to study different paths towards an effective competition as a result of different market configurations. It is found that liberalization may enhance consumer surplus keeping operators’ profitability only when variable costs and access charge to the network are low. Finally, some regulatory measures are discussed.

Keywords: Railway passenger services; liberalization; competition; regulation (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:crnind:v:20:y:2019:i:2:p:164-183

DOI: 10.1177/1783591719858737

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