Rivalry between airport ancillary and city-center supplies

Achim I. Czerny, Hanxiang Zhang

Research output: Journal article publicationJournal articleAcademic researchpeer-review

1 Citation (Scopus)

Abstract

Passengers can buy souvenirs or rent a car at the airport or in the city-center. This paper develops a basic model with unit demands for airport ancillary and city-center demands to derive equilibrium pricing strategies of profit-maximizing airports and city-center companies and evaluates them from the social viewpoint. Passengers are myopic in the sense that only ticket prices matter for flight decisions or foresighted in the sense that non-aeronautical airport and city-center supplies matter for flight decisions, too. We find that the welfare evaluation of equilibrium airport pricing behavior can be independent of whether passengers are myopic or foresighted.

Original languageEnglish
Article number101987
JournalTransportation Research Part E: Logistics and Transportation Review
Volume141
DOIs
Publication statusPublished - Sep 2020

Keywords

  • Airport privatization
  • Ancillary goods
  • City-center rivalry
  • Foresighted passengers
  • Myopic passengers

ASJC Scopus subject areas

  • Business and International Management
  • Civil and Structural Engineering
  • Transportation

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