Title: Strategical Interactions between Transport Operators with Different Goals
Abstract:This paper analyzes competition between transport firms that maximize a weighted combination of profits, income, consumer surplus and a quantity measure. When firms are symmetric, and produce a symmet...This paper analyzes competition between transport firms that maximize a weighted combination of profits, income, consumer surplus and a quantity measure. When firms are symmetric, and produce a symmetrically differentiated service, the paper compares the equilibrium prices that arise from collusion, Cournot and Bertrand competition. The results are discussed in the light of the firms' payoff functions and the degree of substitutability or complementarity between the services. The paper finds that when firms place sufficient weight on consumer surplus, the collusive price can be below that arising from the oligopolistic solution. Atypically for models of oligopolistic competition this case can yield prices from the Bertrand competition that appear to be above those that arise from quantity competition.Read More
Publication Year: 2007
Publication Date: 2007-01-01
Language: en
Type: article
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