Competing Transport Networks
2003-01-16
Research Paper
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In a circular city model, I consider network design and pricing decisions for a single fast transport connection that faces competition from a slower but better accessible transport mode. To access the fast transport network individuals have to make complementary trips by slow mode. This fact has interesting implications on the location decisions. I show that in the presence of competition the profit-maximizing and socially optimal decision would be to cluster the two stations. By contrast, in the absence of competition both a profit-maximizing firm and a social planner would locate the two stations on opposite sides of the circle.
Keywords
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Journal of Economic Literature (JEL) Classification System
Automatically Extracted Terms
- station
- transport
- network
- distance
- location
- connection
- mode network
- competition
- destination
- model
- circle
- transport mode
- demand
- 1/2
- transportation
- market area
- demand function
- price
- individual
- g | y
