Striking evidence: The impact of railway strikes on competition from intercity bus services in Germany

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

No 2251, Kiel Working Papers from Kiel Institute for the World Economy (IfW Kiel)

Abstract: This paper investigates the impact of the largest rail strikes in German history on intercity buses - a then newly liberalised market. 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. Crucially, 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. Beyond transportation, our results highlight the importance of service reliability, as temporary disruptions can cause customers to permanently switch to competitors.

Keywords: Experimentation; inter-modal substitution; learning; optimisation; strike; switching costs; transport (search for similar items in EconPapers)
JEL-codes: C81 D83 L92 R41 (search for similar items in EconPapers)
Date: 2023
New Economics Papers: this item is included in nep-com, nep-mac, nep-tre and nep-ure
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https://www.econstor.eu/bitstream/10419/273076/1/1850832005.pdf (application/pdf)

Related works:
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:zbw:ifwkwp:2251

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