Airport Congestion When Carriers Have Market Power
This paper analyzes airport congestion when carriers are nonatomistic, showing how the results of the road-pricing literature are modified when the economic agents causing congestion have market power. The analysis shows that when an airport is dominated by a monopolist, congestion is fully internalized, yielding no role for congestion pricing under monopoly conditions. Under a Cournot oligopoly, however, carriers are shown to internalize only the congestion they impose on themselves. A toll that captures the uninternalized portion of congestion may then improve the allocation of traffic. The analysis is supported by some rudimentary empirical evidence.
Year of publication: |
2002
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Authors: | Brueckner, Jan K. |
Published in: |
American Economic Review. - American Economic Association - AEA. - Vol. 92.2002, 5, p. 1357-1375
|
Publisher: |
American Economic Association - AEA |
Saved in:
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