This research develops a methodology to assess infrastructure investments and their effects on transport equilibria taking into account competition between multiple privatized transport operator types. The operators, including high-speed rail, hub-and-spoke legacy airlines and regional low-cost carriers, maximize best response functions via prices, frequency and train/plane sizes, given infrastructure provision, cost functions and environmental charges. The methodology is subsequently applied to all 27 European Union countries, specifically analyzing four of the prioritized Trans-European networks. The general conclusions suggest that the European Union, if interested in maximizing overall social welfare, should encourage the development of the high-speed rail network across Europe.
Bibliographical noteFunding Information:
The authors thank Dr. William Lythgoe of the Institute for Transport Studies, University of Leeds for assistance in assembling the data, Avigail Lithwick of Hebrew University for her computer programming and patience and Carsten Schurmann of the Büro für Raumforschung, Raumplanung und Geoinformation for kindly sharing his rail database. This work has been part of the FUNDING consortium, a 6th framework EU funded project coordinated at the Catholic University of Leuven ( http://www.econ.kuleuven.be/funding/ ) and we would like to thank Prof. Stef Proost and Dr. Fay Dunkerley for their generous assistance. Finally, Nicole Adler also thanks the Recanati Fund for partial funding of this work.
- Applied game theory
- High-speed rail
- Infrastructure pricing
- Network optimization