Arbeitspapier

Price Differentiation and Discrimination in Transport Networks

This paper analyzes the effects of price differentiation and discrimination by a monopolistic transport operator, which sets fares in a congestible network. Using three models, with different spatial structures, we describe the operator’s optimal strategies in an unregulated market, a market where price differentiation is not allowed (i.e., ticket prices must be the same for all users), and a market where price discrimination is illegal (i.e., ticket prices must only differ with the marginal external costs of users), and analyze the welfare effects of uniform and non-discriminatory pricing policies. The three models allow us to consider three different forms of price differentiation and discrimination in networks: by user class, by origin-destination pair, and by route. We generalize the existing literature, in which groups usually only differ in their value of time, and hence, there is no distinction between differentiation and discrimination. In our models, users may also have different marginal external costs; we show how these two differences interact. We also show how non-differentiated and non-discriminatory policies may increase or decrease welfare, and that non-discrimination can be worse than non-differentiation. The network models show that results obtained for a single-link network can be generalized to a situation where operators price-discriminate or differentiate based on users’ origins and destinations, but not directly to a situation in which differentiation is based on route choices.

Sprache
Englisch

Erschienen in
Series: Tinbergen Institute Discussion Paper ; No. 14-099/VIII

Klassifikation
Wirtschaft
Production, Pricing, and Market Structure; Size Distribution of Firms
Economics of Regulation
Transportation: General
Thema
price differentiation
price discrimination
transport
networks
congestion

Ereignis
Geistige Schöpfung
(wer)
van der Weijde, Adriaan Hendrik
Ereignis
Veröffentlichung
(wer)
Tinbergen Institute
(wo)
Amsterdam and Rotterdam
(wann)
2014

Handle
Letzte Aktualisierung
20.09.2024, 08:21 MESZ

Datenpartner

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Objekttyp

  • Arbeitspapier

Beteiligte

  • van der Weijde, Adriaan Hendrik
  • Tinbergen Institute

Entstanden

  • 2014

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