1 / 18

1. INTRODUCTION

AN ASSESSMENT OF THE DESIRABILITY OF ON-TRACK COMPETITION: THE IPSWICH-LONDON ROUTE First Conference on Railroad Industry Structure, Competition and Investment, Toulouse, November 7-8, 2003 ANTHONY GLASS e-mail:aglass@its.leeds.ac.uk. 1. INTRODUCTION.  A higher or lower service frequency

isolde
Download Presentation

1. INTRODUCTION

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. AN ASSESSMENT OF THE DESIRABILITY OF ON-TRACK COMPETITION: THE IPSWICH-LONDON ROUTEFirst Conference on Railroad Industry Structure, Competition and Investment, Toulouse, November 7-8, 2003ANTHONY GLASSe-mail:aglass@its.leeds.ac.uk

  2. 1. INTRODUCTION  A higher or lower service frequency  Desirability depends on the accompanying fare changes

  3. 2. BARRIERS TO SERVICE COMPETITION  Mechanism for the moderation of competition  Approach to track access charging  Content of a franchise agreement  Capacity constraints

  4. 3. ENTRY STRATEGIES  Vertical product differentiation  Horizontal product differentiation  Niche market entry  Mixed strategies

  5. 4. GAME THEORY-SEQUENTIAL EQUILIBRIUM  When a strategy is optimal for the remainderof the game based on a rational interpretation of previous play and a rational expectation of future play

  6. 5. GAME THEORY-REPEATED GAME ACROSS SUBSETS  First version of the chain-store game  M+1 players; 1,…,M; 1,…,P; M [1, P]; M<P; and m1 enters p1

  7. 6. GAME THEORY-REPEATED GAME WITHIN A SUBSET  Second version of the chain-store game  V[1, ) and V+1 players    T=max[S+(p-1)]

  8. 7. GAME THEORY-REPUTATION ACQUISITION  Ad hoc assumptions   Fight is defined as a fare cut and accommodate is defined as no fare change or a fare increase  ;Bayes theorem; weightedby elasticity and size of cut

  9. 8. TWO PLAYER SERVICE FREQUENCY GAMES 1. Entrant Higher/Lower No Move 2. Incumbent Fight Accommodate

  10. 9. PAY-OFFS

  11. 10. SOLVING THE TWO PLAYER GAMES  A weighted or unweighted average t is calculated  t <t *  , ,  and  e.g. < and >0 such that +>

  12. 11. CASE STUDY Buffer Station A (Norwich) Ipswich London Buffer Station B (Brighton)

  13. 12. DATA  Network information- timetable, fares, ticket shares by operator and base demand for each OD pair  DETR (2000)1997-1999 modal shares  Tastes and preferences- generalised journey time elasticities of demand and rail service valuations  Variable cost per train km and variable cost per train hour

  14. 13. EMPIRICAL METHODOLOGY  A sample of 100 individuals  Monopoly scenarios and two timetable changes  10% and 20% fare increase and decrease, and no fare change  Profit maximising fare combination  Nash-Bertrand equilibrium and sequential equilibrium

  15. 14. SOCIAL WELFARE

  16. 15. OPERATOR PROFIT

  17. 16. REPUTATION ACQUISTION  SE(H) represents a costless investment and the biggest possible contribution to reputation acquisition  Reputation acquisition costs so AR will probably play no change

  18. 17. CONCLUSIONS  Morehead-on competition can result in a rise in social welfare  More uncertainty about the revenue stream of a TOC  Limited spare capacity

More Related