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Competition in transit markets

Record type: Article

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

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Citation

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

More information

Published date: 2008
Keywords: bus, rail, oligopoly, oligopolistic competition

Identifiers

Local EPrints ID: 74299
URI: http://eprints.soton.ac.uk/id/eprint/74299
ISSN: 0739-8859
PURE UUID: 469ae4ae-8dd9-439a-bc1c-8abc3fe97a0d
ORCID for John Preston: ORCID iD orcid.org/0000-0002-6866-049X

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Date deposited: 12 Mar 2010
Last modified: 18 Jul 2017 23:46

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