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Hub‐Airport Competition: Connecting Time Differentiation And Concession Consumption

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  • MING HSIN LIN

Abstract

This paper develops a network model to analyse the economic effects resulting from the non‐price competition between the home country's and neighbouring country's hub‐airports. Focusing on the trade‐off relationship between the length of the connecting time in the hub‐airport and the consumption opportunities of the transfer passengers, we demonstrate theoretically that even though the hub‐airport bears a cost disadvantage over its rival in providing the hub‐airport service, it still has a chance to earn more profits than its rival by the setting of the connecting time. This finding suggests a new methodology for hub‐airports that attempt to alleviate price competition.

Suggested Citation

  • Ming Hsin Lin, 2006. "Hub‐Airport Competition: Connecting Time Differentiation And Concession Consumption," Australian Economic Papers, Wiley Blackwell, vol. 45(4), pages 299-317, December.
    • Handle: RePEc:bla:ausecp:v:45:y:2006:i:4:p:299-317
    DOI: 10.1111/j.1467-8454.2006.00295.x
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    References listed on IDEAS

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    1. Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, April.
    2. Dave Furth & Dan Kovenock, 1993. "Price leadership in a duopoly with capacity constraints and product differentiation," Journal of Economics, Springer, vol. 57(1), pages 1-35, February.
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    Cited by:

    1. Wan, Xi & Zou, Benteng, 2024. "Multi-product airport competition and optimal airport charges," Research in Transportation Economics, Elsevier, vol. 103(C).
    2. Redondi, Renato & Malighetti, Paolo & Paleari, Stefano, 2011. "Hub competition and travel times in the world-wide airport network," Journal of Transport Geography, Elsevier, vol. 19(6), pages 1260-1271.
    3. Choi, Jong Hae & Wang, Kun & Xia, Wenyi & Zhang, Anming, 2019. "Determining factors of air passengers’ transfer airport choice in the Southeast Asia – North America market: Managerial and policy implications," Transportation Research Part A: Policy and Practice, Elsevier, vol. 124(C), pages 203-216.

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