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Trusting partnerships in a regulatory game: The case of suburban railway transport in Russia

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  • Dementiev, Andrei
  • Loboyko, Anfisa

Abstract

The paper addresses the existing cross-regional diversity of delivery models in the sector of suburban passenger transportation in Russia by building a formal model of endogenous organisational choice. We develop a conceptual game-theoretic framework that allows for the trusting partnership to have become equilibrium in a regulatory bargaining game with delegation. The monopoly service provider initiates a more cooperative relationship with regional authorities by offering a share in the joint venture. The latter being benevolent welfare maximiser either accepts or rejects the offer taking into account transportation market characteristics, local budget constraints, information structure, as well as socio-economic and political factors. Once the partnership is formed the private information of the parties is revealed and information rent is eliminated creating the room for welfare improvement. However, ex ante rational organisational choice to form a trusting partnership may not lead to welfare improvement ex post. In the extended model we consider how concessionary passengers and fare-dodgers affect the bargaining outcomes. Our results can be generalized to characterize the diversity of organizational choices in the public sector.

Suggested Citation

  • Dementiev, Andrei & Loboyko, Anfisa, 2014. "Trusting partnerships in a regulatory game: The case of suburban railway transport in Russia," Research in Transportation Economics, Elsevier, vol. 48(C), pages 209-220.
    • Handle: RePEc:eee:retrec:v:48:y:2014:i:c:p:209-220
    DOI: 10.1016/j.retrec.2014.09.045
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    Cited by:

    1. Dementiev, Andrei, 2016. "Strategic partnerships in local public transport," Research in Transportation Economics, Elsevier, vol. 59(C), pages 65-74.
    2. Dementiev, Andrei, 2018. "Contracting out public transport services to vertical partnerships," Research in Transportation Economics, Elsevier, vol. 69(C), pages 126-134.

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    More about this item

    Keywords

    Trusting partnership; Organisational choice; Delegation; Railway reform; Suburban transport;
    All these keywords.

    JEL classification:

    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation

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