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Airport Congestion Pricing and Passenger Types

Achim I. Czerny and Anming Zhang

No 10-01, WHU Working Paper Series - Economics Group from WHU - Otto Beisheim School of Management

Abstract: We consider a public and congested airport served by airlines that may have market power, and two types of travelers with different relative values of time. We find that in the absence of passenger-type-based price discrimination by airlines, it can be useful to increase the airport charge so as to protect passengers with a great relative time value from excessive congestion caused by passengers with a low relative time value. As a result, the socially efficient airport charge can be substantially higher than what we learned from the recent literature on congestion pricing with non-atomistic airlines.

Keywords: Airports; airlines; passenger types; value of time; congestion; pricing (search for similar items in EconPapers)
JEL-codes: D42 D62 H42 L12 L51 L93 R41 R48 (search for similar items in EconPapers)
Date: 2010-01
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Published Transportation Research Part B, Vol. 45: 595-604, 2011

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