Frictions in a Competitive, Regulated Market Evidence from Taxis

Alessandro Lizzeri, Guilaume Frechette and Tobias Salz

No 11626, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: This paper presents a dynamic general equilibrium model of a taxi mar- ket. The model is estimated using data from New York City yellow cabs. Two salient features by which most taxi markets deviate from the efficient market ideal is the need of both market sides to physically search for trading partners in the product market as well as prevalent regulatory limitations on entry in the capital market. To assess the relevance of these features we use the model to simulate the effect of changes in entry and an alternative search technology. The results are contrasted with a policy that improves the inten- sive margin of medallion utilization through a transfer of medallions to more efficient ownership. We use the geographical features of New York City to back out unobserved demand through a matching simulation.

Date: 2016-11
New Economics Papers: this item is included in nep-cmp, nep-dge and nep-tre
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Citations: View citations in EconPapers (8)

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Related works:
Journal Article: Frictions in a Competitive, Regulated Market: Evidence from Taxis (2019)
Working Paper: Frictions in a Competitive, Regulated Market: Evidence from Taxis (2018)
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