This paper discusses two railroad pricing issues that cannot be resolved entirely by common economic pricing rules. The first is the case where, in the course of one trip, traffic is carried successively over the lines of two or more independently owned railroads. In this case, the price setting process that will best serve the interest of consumers is considered. The author shows that in this case, shippers are likely to end up paying less if both railroads are permitted to set prices together than if they are forced to make their joint rate decisions independently. In the second case, the rental of trackage rights is considered, in which one railroad acquires the right for some of its trains to travel over tracks of another railroad. This problem becomes significant when both railroads each have their own tracks that go part of the way, but part of the route is covered only by tracks owned by one of the railroads. In this case, the potential tenant railroad cannot capture the traffic for itself unless it can rent space on the tracks of its competitor at a price which is reasonable to both railroads. This paper describes the prices that satisfy both this requirement and that of economic efficiency in the shippers' choice between the two railroads.

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  • Supplemental Notes:
    • This paper was originally published in International Journal of Transport Economics, 10, 1983, pp 341-355.
  • Corporate Authors:

    Edward Elgar Publishers

    William Pratt House, 9 Dewey Court
    Northampton, MA  United States  01060-3815
  • Authors:
    • Baumol, W J
  • Publication Date: 2002


  • English

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  • Accession Number: 00964764
  • Record Type: Publication
  • ISBN: 1840645539
  • Files: TRIS
  • Created Date: Nov 2 2003 12:00AM