Competing Transport Networks

Marco van der Leij

No 03-009/1, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: In a circular city model, I consider network design and pricing decisions for asingle fast transport connection that faces competition from a slower but betteraccessible transport mode. To access the fast transport network individuals haveto make complementary trips by slow mode. This fact has interesting implicationson the location decisions. I show that in the presence of competition the profit-maximizingand socially optimal decision would be to cluster the two stations. Bycontrast, in the absence of competition both a profit-maximizing firm and a socialplanner would locate the two stations on opposite sides of the circle.

Keywords: Networks; Transportation; Competition; Market area; Circular city. (search for similar items in EconPapers)
JEL-codes: D40 L91 (search for similar items in EconPapers)
Date: 2003-01-23
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Citations: View citations in EconPapers (1)

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