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Optimal regulation design of airports: Investment incentives and impact of commercial services

Abstract : Modern airports provide commercial services to passengers in addition to aeronautical services to airlines. We analyze how the airport's market power impacts the pricing of services when the airport also invests in the quality of its infrastructure. There is a need to regulate the airport and the optimal regulation can be implemented with a price-cap and a subsidy scheme targeted to the investment. The choice between a single-till and a dual-till approach does change neither the optimal regulation nor its implementation. We also investigate the consequences on the optimal regulation of the nature of the airport-airline relationship and of the observability of investment.
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https://hal.archives-ouvertes.fr/hal-03328394
Contributor : Jerome Pouyet Connect in order to contact the contributor
Submitted on : Thursday, November 10, 2022 - 4:49:58 PM
Last modification on : Monday, November 21, 2022 - 2:35:38 PM

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David Martimort, Guillaume Pommey, Jerome Pouyet. Optimal regulation design of airports: Investment incentives and impact of commercial services. Transportation Research Part B: Methodological, 2022, ⟨10.1016/j.trb.2022.07.008⟩. ⟨hal-03328394v2⟩

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