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Price-cap regulation of airports: single-till versus dual-till

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  • Czerny, Achim I.

Abstract

This paper takes up the debate whether price-cap regulation of airports should take the form of single-till or dual-till regulation. The contribution is to model single- and dual-till regulation, evaluate their welfare implications, and compare them to Ramsey prices. We show that the single-till dominates the dual-till regulation at non-congested airports with regard to welfare maximization. However, none of them provides an airport with the incentives to implement Ramsey prices. A perfect price-cap regulation, which achieves this goal, is also presented.

Suggested Citation

  • Czerny, Achim I., 2004. "Price-cap regulation of airports: single-till versus dual-till," Discussion Papers 2004/13, Technische Universität Berlin, School of Economics and Management.
    • Handle: RePEc:zbw:tubsem:200413
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    1. Niemeier, Hans-Martin, 2002. "Regulation of airports: the case of Hamburg airport—a view from the perspective of regional policy," Journal of Air Transport Management, Elsevier, vol. 8(1), pages 37-48.
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