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Market Structure and Internalization of Congestion in Air Transportation

Author

Listed:
  • Kurt Van Dender

    (Department of Economics, University of California-Irvine)

Abstract

We use a simple analytical framework to derive pricing rules for oligpolistic airlines at airports that are served by competitive airlines as well. The pricing rules show how the degree of internalization of marginal congestion costs depends on market structure. The analysis illustrates the importance of selecting an accurate representation of market structure, when making recommendations about the desirability of congestion pricing mechanisms.

Suggested Citation

  • Kurt Van Dender, 2007. "Market Structure and Internalization of Congestion in Air Transportation," Working Papers 060717, University of California-Irvine, Department of Economics.
    • Handle: RePEc:irv:wpaper:060717
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    File URL: https://www.economics.uci.edu/files/docs/workingpapers/2006-07/VanDender-17.pdf
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    More about this item

    Keywords

    Airports; Airline; Congestion; Congestion tolls; Oligopoly;
    All these keywords.

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise

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