« Is the Public Utility Holding Company Act a Model for Breaking Up the Banks that are Too-Big-to-Fail? | Main | When the Going Gets Tight: Institutional Solutions When Antitrust Enforcement Resources are Scarce »
October 11, 2010
Airport Privatization and International Competition
Posted by D. Daniel Sokol
Toshihiro Matsumura, University of Tokyo - Institute of Social Science and Noriaki Matsushima, Osaka explore Airport Privatization and International Competition.
ABSTRACT: We provide a simple theoretical model to explain the mechanism whereby privatization of international airports can improve welfare. The model consists of a downstream (airline) duopoly with two inputs (landings at two airports) and two types of consumers. The airline companies compete internationally. Using the simple international duopoly model, we show that the outcome where both airports are privatized is always an equilibrium while that where no airport is privatized is another equilibrium only if the degree of product differentiation is large.
October 11, 2010 | Permalink
TrackBack URL for this entry:
Listed below are links to weblogs that reference Airport Privatization and International Competition: