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A Note on Non-Discriminatory Access to Railroad Infrastructure

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  • Russell Pittman

    (U.S. Department of Justice Antitrust Division)

Abstract

The setting of user prices for enterprises with large fixed costs and marginal costs below average costs – “natural monopolies” – raises important policy questions regarding both efficiency and equity. It has become well accepted among economists that, in a variety of settings, welfare may be improved if such prices are set using systems that are non-linear or discriminatory – for example, two-part tariffs and Ramsey pricing. If these pricing schemes are ruled out, the principal alternatives are large government subsidies and the inefficiencies of fully allocated cost pricing. Why should the setting of access prices be any different?

Suggested Citation

  • Russell Pittman, 2003. "A Note on Non-Discriminatory Access to Railroad Infrastructure," Industrial Organization 0303004, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpio:0303004
    Note: Type of Document - ; prepared on PC; pages: 20 ; figures: 2 Figures included
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    References listed on IDEAS

    as
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    3. Antonio Estache & Andrea Goldstein & Russell Pittman, 2001. "Privatization and Regulatory Reform in Brazil: The Case of Freight Railways," Journal of Industry, Competition and Trade, Springer, vol. 1(2), pages 203-235, June.
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    7. Baumol, William J & Bradford, David F, 1970. "Optimal Departures from Marginal Cost Pricing," American Economic Review, American Economic Association, vol. 60(3), pages 265-283, June.
    8. Friedlaender, Ann F & Spady, Richard H, 1980. "A Derived Demand Function for Freight Transportation," The Review of Economics and Statistics, MIT Press, vol. 62(3), pages 432-441, August.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Calvo, Francisco & De Oña, Juan, 2012. "Are rail charges connected to costs?," Journal of Transport Geography, Elsevier, vol. 22(C), pages 28-33.
    2. Russell Pittman, 2003. "Vertical Restructuring (or Not) of the Infrastructure Sectors of Transition Economies," Journal of Industry, Competition and Trade, Springer, vol. 3(1), pages 5-26, March.
    3. de Palma, André & Lindsey, Robin, 2007. "Chapter 2 Transport user charges and cost recovery," Research in Transportation Economics, Elsevier, vol. 19(1), pages 29-57, January.

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    More about this item

    Keywords

    rail; restructuring; vertical separation; access charge; discrimination; Russia;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L9 - Industrial Organization - - Industry Studies: Transportation and Utilities
    • L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation

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