Pricing and infrastructure fees in shaping cooperation in a model of high-speed rail and airline competition

Óscar Álvarez-SanJaime, Pedro Cantos-Sánchez, Rafael Moner-Colonques and José Sempere-Monerris
Authors registered in the RePEc Author Service: Óscar Álvarez San-Jaime ()

Transportation Research Part B: Methodological, 2020, vol. 140, issue C, 22-41

Abstract: This paper studies the effects of cooperation in a hub-and-spoke network with high-speed rail and airline competition. The distinctive elements of our analysis are the consideration of: (i) per-passenger airport and rail infrastructure fees; (ii) mixed bundling pricing by partners, and (iii) an airline duopoly in the international market. We show that partners fix the cheapest bundle price of the combined trip, that non-allied operators respond by decreasing the prices per link, and that connecting traffic increases. Per-passenger fees significantly affect the price differences following cooperation. An empirical application confirms that it is privately profitable and that welfare gains are in the range of 0.8–2.2%; these can be higher for lower fees or lower cross-price elasticity between modes.

Keywords: Airline; Rail; Intermodal substitutability and complementarity; Cooperation (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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DOI: 10.1016/j.trb.2020.07.007

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