Economics at your fingertips  

Effects of asymmetric information on airport congestion management mechanisms

Olivia Aravena, Leonardo J. Basso and Nicolás Figueroa

International Journal of Industrial Organization, 2019, vol. 62, issue C, 4-27

Abstract: We study and compare three different mechanisms for capacity (slot) allocation in a congested airport when airlines have one-dimensional private information: direct allocation of slots, differentiated tolls and slot auctions. With perfect information, direct allocation is a first best policy which can be implemented through Pigouvian taxes or slot auctions; the mechanisms are equivalent in terms of social welfare. With the introduction of asymmetric information this equivalence is lost: direct allocation is always ex-post inefficient and, in some cases, tolls and subsequent quantity delegation is a better alternative social welfare wise. Auctions may be superior or inferior to tolls. We further show that naïve application of Pigouvian tolls is sub-optimal when imperfect information exists.

Keywords: Airport congestion; Pigouvian tolls; Airport slots; Asymmetric information (search for similar items in EconPapers)
JEL-codes: D62 L50 L93 R41 R48 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Access Statistics for this article

International Journal of Industrial Organization is currently edited by P. Bajari, B. Caillaud and N. Gandal

More articles in International Journal of Industrial Organization from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

Page updated 2019-03-16
Handle: RePEc:eee:indorg:v:62:y:2019:i:c:p:4-27