Competition in transit markets


Preston, John (2008) Competition in transit markets. [in special issue: Transit Economics] Research in Transportation Economics, 23, (1), 75-84. (doi:10.1016/j.retrec.2008.10.009).

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Description/Abstract

Despite regulatory reforms in a number of countries, competition in transit markets is still relatively rare. Moreover, where it does occur it tends to be small group in nature and the outcomes are difficult to predict. In this paper, simulation models of competition in inter-urban rail markets and urban bus markets are developed and applied in studies of Great Britain and Sweden. It is found that on busy routes head-on competition is commercially feasible (although for rail this assumes low access charges) but is not socially desirable. For routes with thin demand (or high access costs), competition may be limited to cream skimming. In most competed cases, there appears to be a tendency for the provision of too much service, at too high price and (at least for bus) at too low quality. Rather than classical Bertrand–Cournot oligopoly models, transit markets may be best described by models of oligopolistic competition based on horizontal product differentiation

Item Type: Article
ISSNs: 0739-8859 (print)
Keywords: bus, rail, oligopoly, oligopolistic competition
Subjects: H Social Sciences > HE Transportation and Communications
T Technology > TF Railroad engineering and operation
Divisions: University Structure - Pre August 2011 > School of Civil Engineering and the Environment
ePrint ID: 74299
Date Deposited: 12 Mar 2010
Last Modified: 27 Mar 2014 18:53
URI: http://eprints.soton.ac.uk/id/eprint/74299

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