Networking and Market Entry in the Airline Industry. Some Early Evidence from Deregulation

Networking and Market Entry in the Airline Industry. Some Early Evidence from Deregulation

The success of an airline serving a new city-pair depends on whether the new segment fits in with its existing network. CAB regulations did hamper the development of efficient route structures.

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Deregulating Taxi Services: A Word of Caution

This paper studies pricing and capacity decisions in markets for phone-ordered taxicabs. Firms first choose capacities and then compete in prices. As firm demand increases, so does waiting time. This dampens competition and makes prices too high from the social point of view. Efficiency improves if firms choose large capacities. In a two-firm setting, equilibrium capacities are shown to be larger if both firms maximise total profits than if they maximise profits per cab.

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