Airport Congestion When Carriers Have Market Power

This paper analyzes airport congestion when carriers are nonatomistic, showing how the results of the road-pricing literature are modified when the economic agents causing congestion have market power. The analysis shows that when an airport is dominated by a monopolist, congestion is fully internal...

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Bibliographic Details
Published inThe American economic review Vol. 92; no. 5; pp. 1357 - 1375
Main Author Brueckner, Jan K.
Format Journal Article
LanguageEnglish
Published Nashville American Economic Association 01.12.2002
Subjects
Air fares
Air traffic
Aircraft
Airline scheduling
Airlines
Airports
Civil aviation
Congestion
Economic models
Economics
Flight operations
Market power
Oligopoly
Operating costs
Passengers
Roads & highways
Studies
Tolls
Traffic congestion
Traffic delay
Travel
Vehicular flight
United States > US
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Summary:This paper analyzes airport congestion when carriers are nonatomistic, showing how the results of the road-pricing literature are modified when the economic agents causing congestion have market power. The analysis shows that when an airport is dominated by a monopolist, congestion is fully internalized, yielding no role for congestion pricing under monopoly conditions. Under a Cournot oligopoly, however, carriers are shown to internalize only the congestion they impose on themselves. A toll that captures the uninternalized portion of congestion may then improve the allocation of traffic. The analysis is supported by some rudimentary empirical evidence.
Bibliography:ObjectType-Article-2
SourceType-Scholarly Journals-1
ObjectType-Feature-1
content type line 23
ISSN:0002-8282
1944-7981
DOI:10.1257/000282802762024548