Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

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Monday, November 19, 2012

Access pricing, infrastructure investment and intermodal competition

Posted by D. Daniel Sokol

Gines de Rus (Universidad de las Palmas) and M. Pilar Socorro (Universidad de las Palmas) explain Access pricing, infrastructure investment and intermodal competition.

ABSTRACT: In this paper we analyze the consequences of access pricing on infrastructure investment and intermodal competition. First, we analyze the optimal access prices to be charged to private operators. We find that the optimal access price to be charged for the use of a particular infrastructure depends on the existence of intermodal substitution or complementarity with other transport modes and infrastructures. Second, we analyze under which circumstances the investment in rail infrastructure is socially desirable both in a context with and without budget constraints. The positive net present value of the investment is not a sufficient condition. The necessary and sufficient condition implies a positive difference in social welfare for the cases in which the new infrastructure is and is not constructed.

http://lawprofessors.typepad.com/antitrustprof_blog/2012/11/access-pricing-infrastructure-investment-and-intermodal-competition.html

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