Authors: Marco Henseler
Addresses: Federal Network Agency, Tulpenfeld 4, 53113 Bonn, Germany
Abstract: This article analyses the impact of single-till and dual-till price-cap regulation of railway stations on welfare in case of an outside competitor for commercial services. It can be shown that dual-till instruments dominate for lower levels of fixed costs, whereas single-till regulation performs better for higher levels of fixed costs. The specified recommendation depends, however, additionally on the particular assignment of fixed costs. Since we yield two solutions for charging in case of a single-till regulation, the regulatory body will be obliged to adopt a dual-till regulation for all ranges of fixed costs, unless the station manager can be committed to apply the welfare maximising single-till price-cap.
Keywords: single-till regulation; dual-till regulation; railway stations; price cap regulation; outside competitors; commercial services; fixed costs; welfare; price caps; railways.
International Journal of Management and Network Economics, 2013 Vol.3 No.1, pp.78 - 93
Available online: 13 Jun 2013 *Full-text access for editors Access for subscribers Free access Comment on this article