IDEAS home Printed from https://ideas.repec.org/p/hal/journl/hal-01629768.html
   My bibliography  Save this paper

Intermodal competition and regional inequalities

Author

Listed:
  • Laurent Linnemer

    (CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - X - École polytechnique - IP Paris - Institut Polytechnique de Paris - ENSAE Paris - École Nationale de la Statistique et de l'Administration Économique - CNRS - Centre National de la Recherche Scientifique)

  • Pierre-Philippe Combes

    (CERAS - Centre d'enseignement et de recherche en analyse socio-économique - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, CNRS - Centre National de la Recherche Scientifique)

Abstract

In a model à la Hotelling with discriminatory pricing, we study the impacts of the creation of a new transportation infrastructure that connects two points (as planes or high-speed trains do) and coexists with an old infrastructure that continuously serves space (as roads do). Thus, two transportation modes compete: only road or road plus plane. We characterize the equilibria of a location and price game between two firms. Although airports are symmetrically located, asymmetric equilibria in locations emerge. When the airports are built, relocation of firms induce a decrease of total welfare, if the cost of the transport by plane is not small enough. Regional inequalities appear: in most cases, the welfare of one region decreases when that of the other increases. However consumers' surplus increases, and firms' profits decrease. Finally, we study the optimal location and pricing of the new infrastructure.

Suggested Citation

  • Laurent Linnemer & Pierre-Philippe Combes, 2000. "Intermodal competition and regional inequalities," Post-Print hal-01629768, HAL.
    • Handle: RePEc:hal:journl:hal-01629768
    DOI: 10.1016/S0166-0462(99)00041-1
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Lederer, Phillip J & Hurter, Arthur P, Jr, 1986. "Competition of Firms: Discriminatory Pricing and Location," Econometrica, Econometric Society, vol. 54(3), pages 623-640, May.
    2. repec:bla:econom:v:42:y:1975:i:168:p:401-19 is not listed on IDEAS
    3. Hurter, Arthur Jr & Lederer, Phillip J., 1985. "Spatial duopoly with discriminatory pricing," Regional Science and Urban Economics, Elsevier, vol. 15(4), pages 541-553, November.
    4. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-499, June.
    5. repec:ulb:ulbeco:2013/1759 is not listed on IDEAS
    6. Thisse, Jacques-Francois & Vives, Xavier, 1988. "On the Strategic Choice of Spatial Price Policy," American Economic Review, American Economic Association, vol. 78(1), pages 122-137, March.
    7. repec:bla:econom:v:48:y:1981:i:189:p:79-86 is not listed on IDEAS
    8. de Palma, A, et al, 1985. "The Principle of Minimum Differentiation Holds under Sufficient Heterogeneity," Econometrica, Econometric Society, vol. 53(4), pages 767-781, July.
    9. Hamilton, Jonathan H. & Thisse, Jacques-Francois, 1992. "Duopoly with spatial and quantity- dependent price discrimination," Regional Science and Urban Economics, Elsevier, vol. 22(2), pages 175-185, June.
    10. Martin, Philippe & Rogers, Carol Ann, 1995. "Industrial location and public infrastructure," Journal of International Economics, Elsevier, vol. 39(3-4), pages 335-351, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Didier Baudewyns, 2001. "Urban public facility location, multipurpose trips and spatial competition: equilibrium and welfare analysis," Nova SBE Working Paper Series wp400, Universidade Nova de Lisboa, Nova School of Business and Economics.
    2. Bilotkach, Volodymyr & Fageda, Xavier & Flores-Fillol, Ricardo, 2010. "Scheduled service versus personal transportation: The role of distance," Regional Science and Urban Economics, Elsevier, vol. 40(1), pages 60-72, January.
    3. Hugo Ferreira Braga Tadeu & Jersone Tasso Moreira Silva, 2012. "A Theoretical Framework for the Brazilian Airline Competitive Market Environment," Review of Economics & Finance, Better Advances Press, Canada, vol. 2, pages 97-106, May.
    4. Masahisa Fujita & Jacques‐François Thisse, 2003. "Does Geographical Agglomeration Foster Economic Growth? And Who Gains and Loses from It?," The Japanese Economic Review, Japanese Economic Association, vol. 54(2), pages 121-145, June.
    5. Zhang, Qi & Wang, Wenyuan & Peng, Yun & Zhang, Junyi & Guo, Zijian, 2018. "A game-theoretical model of port competition on intermodal network and pricing strategy," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 114(C), pages 19-39.
    6. Theodore Tsekeris & Klimis Vogiatzoglou, 2014. "Public infrastructure investments and regional specialization: empirical evidence from Greece," Regional Science Policy & Practice, Wiley Blackwell, vol. 6(3), pages 265-289, August.
    7. Tsekeris, Theodore, 2014. "Multi-sectoral interdependencies of regional public infrastructure investments," Socio-Economic Planning Sciences, Elsevier, vol. 48(4), pages 263-272.
    8. Concepción Román, 2008. "Competencia intermodal en el corredor Madrid-Zaragoza-Barcelona ante la introducción del tren de alta velocidad," Economic Reports 11-08, FEDEA.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Stefano Colombo, 2009. "The unidirectional Hotelling model with spatial price discrimination," Economics Bulletin, AccessEcon, vol. 29(4), pages 3031-3040.
    2. Ottaviano, Gianmarco & Thisse, Jacques-Francois, 2004. "Agglomeration and economic geography," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 58, pages 2563-2608, Elsevier.
    3. Encaoua David & Hollander Abraham, 2007. "First-Degree Discrimination by a Duopoly: Pricing and Quality Choice," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 7(1), pages 1-21, May.
    4. Stefano Colombo, 2011. "Spatial price discrimination in the unidirectional Hotelling model with elastic demand," Journal of Economics, Springer, vol. 102(2), pages 157-169, March.
    5. Colombo, Stefano, 2010. "Product differentiation, price discrimination and collusion," Research in Economics, Elsevier, vol. 64(1), pages 18-27, March.
    6. Pires, Cesaltina Pacheco, 2005. "Constrained efficient locations under delivered pricing," Regional Science and Urban Economics, Elsevier, vol. 35(1), pages 49-56, January.
    7. Pires, Cesaltina Pacheco & Sarkar, Soumodip, 2000. "Delivered nonlinear pricing by duopolists," Regional Science and Urban Economics, Elsevier, vol. 30(4), pages 429-456, July.
    8. Kristian Behrens, 2005. "Choix de localisation et structure du commerce intra-branche," Revue économique, Presses de Sciences-Po, vol. 56(4), pages 965-982.
    9. Boyer, Marcel & Mahenc, Philippe & Moreaux, Michel, 2003. "Entry preventing locations under incomplete information," International Journal of Industrial Organization, Elsevier, vol. 21(6), pages 809-829, June.
    10. Kristian Behrens, 2003. "Localisation et endogénéité des structures d'échanges," Working Papers hal-01545577, HAL.
    11. Cesaltina Pires, 2009. "Location choice under delivered pricing: a reinterpretation," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 43(1), pages 199-213, March.
    12. Aguirre, Inaki & Espinosa, Maria Paz & Macho-Stadler, Ines, 1998. "Strategic entry deterrence through spatial price discrimination," Regional Science and Urban Economics, Elsevier, vol. 28(3), pages 297-314, May.
    13. Sílvia Ferreira Jorge & Cesaltina Pacheco Pires, 2004. "Delivered versus Mill Nonlinear Pricing in Free Entry Markets," Microeconomics 0409006, University Library of Munich, Germany.
    14. Joe Tharakan & Jacques-François Thisse, 2011. "Market Integration: Trade versus Economic Geography," Chapters, in: Miroslav N. Jovanović (ed.), International Handbook on the Economics of Integration, Volume II, chapter 6, Edward Elgar Publishing.
    15. John S. Heywood & Zheng Wang, 2020. "Profitable collusion on costs: a spatial model," Journal of Economics, Springer, vol. 131(3), pages 267-286, December.
    16. Stef Proost & Jacques-François Thisse, 2019. "What Can Be Learned from Spatial Economics?," Journal of Economic Literature, American Economic Association, vol. 57(3), pages 575-643, September.
    17. John S. Heywood & Zheng Wang, 2023. "An upstream monopoly with transport costs," Journal of Economics, Springer, vol. 139(2), pages 159-176, July.
    18. Jean-Jacques Laffont & Michel Moreaux & Marcel Boyer & Philippe Mahenc, 1991. "Concurrence spatiale et distorsions de localisation en information incomplète," Revue Économique, Programme National Persée, vol. 42(6), pages 1047-1088.
    19. Colombo, Stefano, 2012. "An indifference result concerning collusion in spatial frameworks," Research in Economics, Elsevier, vol. 66(1), pages 18-21.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:journl:hal-01629768. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.