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

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.