Market equilibriums for transport operators with several goals

The paper addresses a transport market consisting of two firms with goals extending beyond pure profit maximization. Considering that transport companies often have public owners and that managers have different objective that the owners, it is argued the firms maximize a weighted sum of profits, revenues and total consumer surplus. The paper analyzes equilibrium fares and quantities arising from collusion and competition on price (Bertrand) and quantity (Cournot), when the firms produce symmetrically differentiable services and have identical cost and goal functions. Special focus is given to analyzing how the firms’ costs, the degree of substitutability and complementarity between their services and their goal functions influence equilibrium prices in the three different competitive situations. The influence of parameters included in the model regarding the differences between the equilibrium prices is also addressed. The study provides relevant knowledge for transport authorities of how transport firms respond to changes in competitive regimes depending on their objectives and competitive situation.

• Record URL:
  https://doi.org/10.1007/s12544-013-0125-x
• Availability:
  • Find a library where document is available. Order URL: http://worldcat.org/issn/18668887
• Supplemental Notes:
  • © 2014 Finn Jørgensen and Terje Andreas Mathisen
• Authors:
  • Jørgensen, Finn
  • Mathisen, Terje Andreas
• Publication Date: 2014-9

Language

• English

Media Info

• Media Type: Digital/other
• Features: Figures; References; Tables;
• Pagination: pp 241-251
• Serial:
  • European Transport Research Review
  • Volume: 6
  • Issue Number: 3
  • Publisher: Springer Publishing
  • ISSN: 1866-8887
  • EISSN: 1867-0717
  • Serial URL: http://link.springer.com/journal/12544
• Publication flags:

  Open Access (libre)

Subject/Index Terms

• TRT Terms: Business practices; Competition; Equilibrium (Economics); Fares; Markets; Profits; Transportation departments
• Subject Areas: Economics; Finance; Public Transportation; I10: Economics and Administration;

Filing Info

• Accession Number: 01545331
• Record Type: Publication
• Files: TRIS
• Created Date: Nov 26 2014 3:05PM