Trusting partnerships in a regulatory game: The case of suburban railway transport in Russia

Andrei Dementiev () and Anfisa Loboyko

Research in Transportation Economics, 2014, vol. 48, issue C, 209-220

Abstract: The paper addresses the existing cross-regional diversity of delivery models in the sector of suburban passenger transportation in Russia by building a formal model of endogenous organisational choice. We develop a conceptual game-theoretic framework that allows for the trusting partnership to have become equilibrium in a regulatory bargaining game with delegation. The monopoly service provider initiates a more cooperative relationship with regional authorities by offering a share in the joint venture. The latter being benevolent welfare maximiser either accepts or rejects the offer taking into account transportation market characteristics, local budget constraints, information structure, as well as socio-economic and political factors. Once the partnership is formed the private information of the parties is revealed and information rent is eliminated creating the room for welfare improvement. However, ex ante rational organisational choice to form a trusting partnership may not lead to welfare improvement ex post. In the extended model we consider how concessionary passengers and fare-dodgers affect the bargaining outcomes. Our results can be generalized to characterize the diversity of organizational choices in the public sector.

Keywords: Trusting partnership; Organisational choice; Delegation; Railway reform; Suburban transport (search for similar items in EconPapers)
JEL-codes: D78 H41 H72 L51 L92 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0739885914000869
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: https://EconPapers.repec.org/RePEc:eee:retrec:v:48:y:2014:i:c:p:209-220

Ordering information: This journal article can be ordered from
http://www.elsevier.com/wps/find/supportfaq.cws_home/regional
https://shop.elsevie ... _01_ooc_2&version=01

DOI: 10.1016/j.retrec.2014.09.045

Access Statistics for this article

Research in Transportation Economics is currently edited by M. Dresner

More articles in Research in Transportation Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().