Scheduling in On-Route Competition

Scheduled transport operators' pricing, departure timing and frequency decisions are analysed in a horizontal product differentiation model with two dimensions. The first dimension concerns the availability of a departure at the preferred time of consumers. The second dimension concerns exogenous quality differentiation between operators' services. This model shows that operators choose intervals between their own departures that minimise consumers' waiting costs, and set prices that do not depend on the level of competition in terms of frequency. Operators do not have a strategic incentive to duplicate each other's departures and choose similar frequencies. The combined schedule of operators' individual schedules shows interlaced departures in which a departure from one operator is followed by a departure from the other.