Hub-airport Competition, Airline Competition and Economic Welfare

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Description

This paper analyzes the economic effects resulting from the hub-airport competition and the corresponding airline competition between the home country and the neighboring country. Comparing the equilibrium of a Monopoly-hub network where the connecting passengers only have the home country’s via-hub routing choice with the equilibrium of an Inter-hub network where the passengers can choose the home country’s or the neighboring country’s via-hub routing, it is found that the competition increases the consumer surplus of the connecting passengers and improves the home country’s social welfare if and only if the home country’s hub-airport competes with the neighboring country’s hub-airport while respecting the welfare of the passengers sufficiently well.

Journal

  • 経済科学

    経済科学 50 (4), 49-65, 2003-03-25

    名古屋大学大学院経済学研究科

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