Split incentive problem in the uptake of new ATM technology

Saskia van der Loo, Christophe Heyndrickx and Eef Delhaye

Journal of Air Transport Management, 2023, vol. 108, issue C

Abstract: We analyse the problem of split incentives between Air Navigation Service Providers (ANSP) and airlines in adopting disruptive technologies. We develop a theoretical model allowing us to analyse the uptake of technologies based on the potential efficiency gains of both the ANSP and the airlines. Next, we illustrate this model numerically. Our first, intuitive, result is that while regulation of navigation fees is necessary, it also hinders the investments in new technologies. Secondly, we see that the uptake of technologies would be faster in a one-to-one setting. Thirdly, it is not certain that increased competition between ANSPs will stimulate innovation. Finally, an overall technological mandate can be welfare improving as it reduces uncertainty.

Keywords: Air traffic control; Technology uptake; Innovation; Split-incentives; Network effect (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jaitra:v:108:y:2023:i:c:s0969699722001703

DOI: 10.1016/j.jairtraman.2022.102351

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