Airport complementarity: Private vs. government ownership and welfare gravitation

Benny Mantin

Transportation Research Part B: Methodological, 2012, vol. 46, issue 3, 381-388

Abstract: We study the effects of airport ownership (private vs. government) on welfare in the presence of airport complementarity, where each airport is located in a different country. Considering Cournot competition in the airline market, the unique Nash equilibrium is such that the two countries privatize their airports, even though both countries are better off, from a welfare perspective, with public (government-owned) airports. Considering a differentiated Bertrand competition in the airline market, the same result prevails if the cross price elasticities are sufficiently high, otherwise the symmetric government-ownership of airports may also be a Nash equilibrium.

Keywords: Airports; Private ownership; Public ownership; Complementarity (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (35)

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DOI: 10.1016/j.trb.2011.10.001

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