Frédéric Cherbonnier, M. Ivaldi, Catherine Muller-Vibes, Karine Van der Straeten
Abstract This paper is aimed at evaluating the net gains and trade-offs at stake in implementing the competition of the rail mode in the long distance passenger market either by means of franchise or by an open access mechanism. We simulate the outcomes of competition in and for the market using a differentiated-products oligopoly model allowing for inter- and intra-modal competition in a long distance passenger market. Specifically we first calibrate the model using data describing high speed lines in France and show that the incumbent railway operator’s strategy does not simply boil down to a short-term profit maximization (e.g. because of existing regulation or limit-pricing strategy). This yields two important results when simulating competition. First, whether it is for or in the market, the opening to competition does not guarantee a decrease in prices in favor of passengers. Second, the effects of opening up to competition for the market are relatively predictable and potentially positive, while those of opening up to competition in the market remain very uncertain.
{"title":"Competition For Versus In the Market of Long-Distance Passenger Rail Services","authors":"Frédéric Cherbonnier, M. Ivaldi, Catherine Muller-Vibes, Karine Van der Straeten","doi":"10.1515/rne-2018-0007","DOIUrl":"https://doi.org/10.1515/rne-2018-0007","url":null,"abstract":"Abstract This paper is aimed at evaluating the net gains and trade-offs at stake in implementing the competition of the rail mode in the long distance passenger market either by means of franchise or by an open access mechanism. We simulate the outcomes of competition in and for the market using a differentiated-products oligopoly model allowing for inter- and intra-modal competition in a long distance passenger market. Specifically we first calibrate the model using data describing high speed lines in France and show that the incumbent railway operator’s strategy does not simply boil down to a short-term profit maximization (e.g. because of existing regulation or limit-pricing strategy). This yields two important results when simulating competition. First, whether it is for or in the market, the opening to competition does not guarantee a decrease in prices in favor of passengers. Second, the effects of opening up to competition for the market are relatively predictable and potentially positive, while those of opening up to competition in the market remain very uncertain.","PeriodicalId":45659,"journal":{"name":"Review of Network Economics","volume":"8 3 1","pages":"203 - 238"},"PeriodicalIF":0.7,"publicationDate":"2017-06-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"83388904","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract This paper revises some of the common views on transport infrastructure investment and proposes alternative ways to achieve a more efficient planning, evaluation and financing of transport infrastructures in a world where planners may pursue their own interests, there exist different levels of government, and budget constraints are pervasive. We focus on the need for public planning and independent economic evaluation, and the importance of deciding the pricing scheme in the planning phase. We also discuss the institutional design and its effect on investment decisions, particularly, the financing of projects under different levels of government and its perverse consequences on infrastructure capacity choices. We use as an example the development of the HSR to serve medium-distance trips in corridors where air transport is a very close substitute.
{"title":"Planning, Evaluation and Financing of Transport Infrastructures: Rethinking the Basics","authors":"Ginés de Rus, M. Socorro","doi":"10.1515/rne-2017-0053","DOIUrl":"https://doi.org/10.1515/rne-2017-0053","url":null,"abstract":"Abstract This paper revises some of the common views on transport infrastructure investment and proposes alternative ways to achieve a more efficient planning, evaluation and financing of transport infrastructures in a world where planners may pursue their own interests, there exist different levels of government, and budget constraints are pervasive. We focus on the need for public planning and independent economic evaluation, and the importance of deciding the pricing scheme in the planning phase. We also discuss the institutional design and its effect on investment decisions, particularly, the financing of projects under different levels of government and its perverse consequences on infrastructure capacity choices. We use as an example the development of the HSR to serve medium-distance trips in corridors where air transport is a very close substitute.","PeriodicalId":45659,"journal":{"name":"Review of Network Economics","volume":"1 1","pages":"143 - 160"},"PeriodicalIF":0.7,"publicationDate":"2017-06-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"79850313","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract This paper provides an analysis of the funding structure of the railways in eight European countries. It updates and expands the well-known database on public contributions to rail, which has initially been published by [NERA (2004) Study of the Financing of and Public Budget Contributions to Railways: A Final Report for European Commission, DG TREN. London: NERA National Economic Research Associates.]. The analysis shows that there are large differences concerning the focus of granted funds which can be explained by different policy objectives, differences in the level and degree of network access charges and different cost coverage ratios of public transport services. We identify a tendency towards two main financing models. In our data-set countries either focus their support payments on the operation of the infrastructure, which implies lower network charges and thus a lower amount of necessary Public Service Compensations, or they focus on the support of transport services with a higher degree of cost coverage of network charges and thus a lower amount of operating contributions paid to the infrastructure manager. The structure of funds, different approaches of infrastructure financing and differences in the treatment of historical debt are likely to have an influence on the performance of the investigated railway systems.
{"title":"Public Budget Contributions to the European Rail Sector","authors":"J. Schäfer, G. Götz","doi":"10.1515/rne-2017-0044","DOIUrl":"https://doi.org/10.1515/rne-2017-0044","url":null,"abstract":"Abstract This paper provides an analysis of the funding structure of the railways in eight European countries. It updates and expands the well-known database on public contributions to rail, which has initially been published by [NERA (2004) Study of the Financing of and Public Budget Contributions to Railways: A Final Report for European Commission, DG TREN. London: NERA National Economic Research Associates.]. The analysis shows that there are large differences concerning the focus of granted funds which can be explained by different policy objectives, differences in the level and degree of network access charges and different cost coverage ratios of public transport services. We identify a tendency towards two main financing models. In our data-set countries either focus their support payments on the operation of the infrastructure, which implies lower network charges and thus a lower amount of necessary Public Service Compensations, or they focus on the support of transport services with a higher degree of cost coverage of network charges and thus a lower amount of operating contributions paid to the infrastructure manager. The structure of funds, different approaches of infrastructure financing and differences in the treatment of historical debt are likely to have an influence on the performance of the investigated railway systems.","PeriodicalId":45659,"journal":{"name":"Review of Network Economics","volume":"77 1","pages":"123 - 89"},"PeriodicalIF":0.7,"publicationDate":"2017-06-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"74456869","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract This article contributes to understanding the organization of collusive agreements by studying the inner-workings of the graphite electrode cartel. For this purpose: (i) we construct a database that comprises 49 meetings between 24 cartel members during the life period of the agreement, and (ii) we develop a conceptual framework that captures the affiliation of cartel members to meetings. Using statistical methods of social networks, we find that the cartel is organized around a few highly connected sub-networks that are close to each other.
{"title":"Cartels as Small World Networks: Evidence from Graphite Electrode Cartel","authors":"Carlos J. Ponce, Flavia Roldán","doi":"10.1515/rne-2016-0047","DOIUrl":"https://doi.org/10.1515/rne-2016-0047","url":null,"abstract":"Abstract This article contributes to understanding the organization of collusive agreements by studying the inner-workings of the graphite electrode cartel. For this purpose: (i) we construct a database that comprises 49 meetings between 24 cartel members during the life period of the agreement, and (ii) we develop a conceptual framework that captures the affiliation of cartel members to meetings. Using statistical methods of social networks, we find that the cartel is organized around a few highly connected sub-networks that are close to each other.","PeriodicalId":45659,"journal":{"name":"Review of Network Economics","volume":"66 1","pages":"27 - 61"},"PeriodicalIF":0.7,"publicationDate":"2017-03-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"83996343","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Aurora García-Gallego, Nikolaos Georgantzís, Pedro Pereira, J. C. Pernías-Cerrillo
Abstract We analyze the impact on consumer prices of some information characteristics of price-comparison search platforms. An equilibrium model where vendors compete in prices and consumers do not observe prices, but can obtain price information through a search platform, is developed. The model generates several predictions about the impact on the price distribution of: (i) the size of the search platform’s sample, (ii) whether the search platform’s sample is random, and (iii) the number of vendors in the market. The model’s predictions are tested experimentally. The results confirm the predictions about (ii) and (iii), but reject the model’s predictions about (i).
{"title":"Bias and Size Effects of Price-Comparison Platforms: Theory and Experimental Evidence","authors":"Aurora García-Gallego, Nikolaos Georgantzís, Pedro Pereira, J. C. Pernías-Cerrillo","doi":"10.1515/rne-2016-0015","DOIUrl":"https://doi.org/10.1515/rne-2016-0015","url":null,"abstract":"Abstract We analyze the impact on consumer prices of some information characteristics of price-comparison search platforms. An equilibrium model where vendors compete in prices and consumers do not observe prices, but can obtain price information through a search platform, is developed. The model generates several predictions about the impact on the price distribution of: (i) the size of the search platform’s sample, (ii) whether the search platform’s sample is random, and (iii) the number of vendors in the market. The model’s predictions are tested experimentally. The results confirm the predictions about (ii) and (iii), but reject the model’s predictions about (i).","PeriodicalId":45659,"journal":{"name":"Review of Network Economics","volume":"67 1","pages":"1 - 34"},"PeriodicalIF":0.7,"publicationDate":"2017-01-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"80411058","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract The aim of this paper is to study the occurrence of Fixed-Mobile Substitution (FMS) in the Middle East North African (MENA) region. While there have been many studies on developed countries, empirical evidence for developing countries is somehow limited. In the last few years, mobile cellular subscriptions achieved a tremendous growth across the MENA region making it the second fastest growing region in the world in terms of mobile subscriptions in 2012, and the fastest growing region in terms of mobile traffic in 2014. Fixed subscriptions have also grown but at a slower rate than mobile subscriptions. Using unbalanced data on 17 MENA countries over the period 1990–2009, we explore the relationship between fixed and mobile telephone services by using dynamic panel data models. We find empirical evidence for asymmetric one-way substitution between fixed-lines and mobile phones and we estimate own- and cross-price elasticities for fixed and mobile telephone services in MENA region. The results are then used to derive policy implications in terms of market redefinition, taxation policies, extension of universal services and broadband markets.
{"title":"Fixed-Mobile Substitution in MENA Countries: The Future of Fixed-Line Markets","authors":"Riham A. Ezzat","doi":"10.1515/rne-2017-0013","DOIUrl":"https://doi.org/10.1515/rne-2017-0013","url":null,"abstract":"Abstract The aim of this paper is to study the occurrence of Fixed-Mobile Substitution (FMS) in the Middle East North African (MENA) region. While there have been many studies on developed countries, empirical evidence for developing countries is somehow limited. In the last few years, mobile cellular subscriptions achieved a tremendous growth across the MENA region making it the second fastest growing region in the world in terms of mobile subscriptions in 2012, and the fastest growing region in terms of mobile traffic in 2014. Fixed subscriptions have also grown but at a slower rate than mobile subscriptions. Using unbalanced data on 17 MENA countries over the period 1990–2009, we explore the relationship between fixed and mobile telephone services by using dynamic panel data models. We find empirical evidence for asymmetric one-way substitution between fixed-lines and mobile phones and we estimate own- and cross-price elasticities for fixed and mobile telephone services in MENA region. The results are then used to derive policy implications in terms of market redefinition, taxation policies, extension of universal services and broadband markets.","PeriodicalId":45659,"journal":{"name":"Review of Network Economics","volume":"145 1","pages":"387 - 417"},"PeriodicalIF":0.7,"publicationDate":"2017-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"86215212","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract Governments make substantial contributions to the finance of railways in Europe. This paper first considers the possible justifications for subsidies – namely normalisation of accounts, public service obligations, economies of density, relief of externalities on other modes, wider economic benefits and option values. It then considers the alternative ways of giving subsidies in the form of contributions to infrastructure costs, investment grants and subsidies to services. It concludes that there are good reasons for subsidising railways – in particular a first best argument for subsidising infrastructure will usually exist and a failure to do so will lead to fewer services being operated than are economically justified – but there is a need to ensure subsidies are used efficiently. Ways of achieving this include the setting of clear objectives and financial constraints, decentralisation of decision taking to focussed sector management, regulation and benchmarking of infrastructure costs and the introduction of competition for and in the market. Together these should reduce or eliminate the link between subsidies and inefficiency observed in earlier times.
{"title":"Railway Finance in Europe","authors":"C. Nash","doi":"10.1515/rne-2017-0039","DOIUrl":"https://doi.org/10.1515/rne-2017-0039","url":null,"abstract":"Abstract Governments make substantial contributions to the finance of railways in Europe. This paper first considers the possible justifications for subsidies – namely normalisation of accounts, public service obligations, economies of density, relief of externalities on other modes, wider economic benefits and option values. It then considers the alternative ways of giving subsidies in the form of contributions to infrastructure costs, investment grants and subsidies to services. It concludes that there are good reasons for subsidising railways – in particular a first best argument for subsidising infrastructure will usually exist and a failure to do so will lead to fewer services being operated than are economically justified – but there is a need to ensure subsidies are used efficiently. Ways of achieving this include the setting of clear objectives and financial constraints, decentralisation of decision taking to focussed sector management, regulation and benchmarking of infrastructure costs and the introduction of competition for and in the market. Together these should reduce or eliminate the link between subsidies and inefficiency observed in earlier times.","PeriodicalId":45659,"journal":{"name":"Review of Network Economics","volume":"11 1","pages":"67 - 88"},"PeriodicalIF":0.7,"publicationDate":"2017-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"75462162","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract When a consumer pays by card, the merchant’s bank pays to the consumer’s bank an interchange fee. In this article, we construct a general model of a card platform that unifies the literature on interchange fees. We enrich the existing frameworks by analyzing the choice of the interchange fee when consumer demand is elastic to retail prices. We show that the difference between the privately set structure of payment card fees and the socially optimal one depends both on banks’ and merchants’ pass-through of their costs to consumers. We argue that the maturity of the payment card market impacts the redistributive effects of interchange fees (i.e. between consumers and merchants, card and cash users) and therefore, their optimal regulation.
{"title":"Who Pays for Card Payments? A General Model on the Role of Interchange Fees","authors":"Carlotta Mariotto, Marianne Verdier","doi":"10.1515/rne-2018-0003","DOIUrl":"https://doi.org/10.1515/rne-2018-0003","url":null,"abstract":"Abstract When a consumer pays by card, the merchant’s bank pays to the consumer’s bank an interchange fee. In this article, we construct a general model of a card platform that unifies the literature on interchange fees. We enrich the existing frameworks by analyzing the choice of the interchange fee when consumer demand is elastic to retail prices. We show that the difference between the privately set structure of payment card fees and the socially optimal one depends both on banks’ and merchants’ pass-through of their costs to consumers. We argue that the maturity of the payment card market impacts the redistributive effects of interchange fees (i.e. between consumers and merchants, card and cash users) and therefore, their optimal regulation.","PeriodicalId":45659,"journal":{"name":"Review of Network Economics","volume":"32 1","pages":"307 - 349"},"PeriodicalIF":0.7,"publicationDate":"2017-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"85021299","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper sets out the evolution of international rail traffic in recent years and some of the legislative measures taken by the European Union to strengthen rail. If the same tools that have successfully been deployed for charges of domestic transport by rail are applied to cross border services, results will be systematically distorted to the detriment of cross border services.
{"title":"Infrastructure Charges for International Train Services","authors":"Frank Jost","doi":"10.1515/rne-2018-0011","DOIUrl":"https://doi.org/10.1515/rne-2018-0011","url":null,"abstract":"This paper sets out the evolution of international rail traffic in recent years and some of the legislative measures taken by the European Union to strengthen rail. If the same tools that have successfully been deployed for charges of domestic transport by rail are applied to cross border services, results will be systematically distorted to the detriment of cross border services.","PeriodicalId":45659,"journal":{"name":"Review of Network Economics","volume":"27 1","pages":"171 - 176"},"PeriodicalIF":0.7,"publicationDate":"2017-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"86318783","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Rail transport does not seem to live up to its potential in terms of the contributions it could make to satisfy the transport and mobility needs in the EU and in other economies; this concerns in particular the significant contribution it could make to the decarbonization of transport.1 The latter holds despite substantial government funding of the railway sector. In May 2017, a workshop on “Financing, Regulation and Performance of the European Rail Sector” brought together academics and stakeholders at Justus Liebig University Giessen to discuss these topics from various angles. This special issue presents selected contributions from the workshop to provide both academia and practitioners from the sector with a state of the art overview of railway funding and financing as well as on selected policy debates and recent regulatory changes ranging from the setting of access charges to the optimal (vertical) structure of the sector. Chris Nash surveys “Railway Finance in Europe” and provides both a general overview of the possible justifications for subsidies to the rail sector and an evaluation of how these subsidies are given in practice as well as how efficient use of these subsidies could be ensured. Jan Schäfer and Georg Götz complement this survey with the presentation of a detailed database on the public funding structure in eight European countries. They highlight that some countries like Germany and France mainly fund the provision of (regional) passenger train services via Public Service Obligations, which to a large degree cover high track access charges, while other countries like the UK directly finance the operation of the infrastructure. Lorenzo Casullo focuses his discussion of the funding
{"title":"Special Issue on “Financing, Regulation and Performance of the European Rail Sector”","authors":"G. Götz, J. Schäfer","doi":"10.1515/rne-2018-0023","DOIUrl":"https://doi.org/10.1515/rne-2018-0023","url":null,"abstract":"Rail transport does not seem to live up to its potential in terms of the contributions it could make to satisfy the transport and mobility needs in the EU and in other economies; this concerns in particular the significant contribution it could make to the decarbonization of transport.1 The latter holds despite substantial government funding of the railway sector. In May 2017, a workshop on “Financing, Regulation and Performance of the European Rail Sector” brought together academics and stakeholders at Justus Liebig University Giessen to discuss these topics from various angles. This special issue presents selected contributions from the workshop to provide both academia and practitioners from the sector with a state of the art overview of railway funding and financing as well as on selected policy debates and recent regulatory changes ranging from the setting of access charges to the optimal (vertical) structure of the sector. Chris Nash surveys “Railway Finance in Europe” and provides both a general overview of the possible justifications for subsidies to the rail sector and an evaluation of how these subsidies are given in practice as well as how efficient use of these subsidies could be ensured. Jan Schäfer and Georg Götz complement this survey with the presentation of a detailed database on the public funding structure in eight European countries. They highlight that some countries like Germany and France mainly fund the provision of (regional) passenger train services via Public Service Obligations, which to a large degree cover high track access charges, while other countries like the UK directly finance the operation of the infrastructure. Lorenzo Casullo focuses his discussion of the funding","PeriodicalId":45659,"journal":{"name":"Review of Network Economics","volume":"90 1","pages":"63 - 65"},"PeriodicalIF":0.7,"publicationDate":"2017-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"88982825","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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