Measuring Competition Intensity; An Application to Air/HSR Transport Markets

Christiaan Behrens and Mark Leijsen
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Christiaan Behrens: VU University Amsterdam
Mark Leijsen: VU University Amsterdam

No 15-075/VIII, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: We develop a method to measure the intensity of competition between firms. Our method, which we call the Best Response Measure (BRM), is related to the conduct parameter method, but avoids the main problems associated with that method. The BRM relies on a very general framework and limited data requirements. Moreover, we show that it provides valuable information in determining the relevant market. We illustrate how the BRM can be used in markets with imperfect substitutes and apply the method to aviation markets in the North Sea area. This also enables us to establish to what extent the high speed rail link between London and the European mainland affects the supply by air carriers.

Keywords: inter- and intramodal competition; aviation; spatial networks; high-speed rail (search for similar items in EconPapers)
JEL-codes: D22 D43 L10 L93 R41 (search for similar items in EconPapers)
Date: 2015-06-24
New Economics Papers: this item is included in nep-com and nep-tre
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:tin:wpaper:20150075

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