Exploring the effects of competition for railway markets

Lalive, Rafael; Schmutzler, Armin

doi:10.1016/j.ijindorg.2007.02.005

Cited by 52 publications

(23 citation statements)

References 17 publications

(13 reference statements)

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“…We do not make any attempt to show that competitive franchising is a desirable method of allocating railway services. However, our empirical analysis in Lalive and Schmutzler (2008) suggests that competitively procured lines indeed perform better than lines where competitive mechanisms are not used.…”

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confidence: 72%

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Entry in Liberalized Railway Markets: The German Experience

Lalive¹,

Schmutzler

2008

Review of Network Economics

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In Germany, competitive franchising is increasingly being used to procure passenger railway services that were previously provided by a state monopolist. This paper analyzes 77 tenders that differ with respect to network size, service frequency, contract duration and the proximity to other lines that are already run by competitors of DB Regio, a subsidiary of the successor of the former state monopolist. Our analysis shows that competitors are more likely to win small networks and more recent auctions. Other controls such as contract duration and the adjacency to other lines run by entrants are insignificant.

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confidence: 72%

“…However, the circumstances that induce entry are clearly informative of the circumstances that induce aggressive bidding. 5 There is considerable overlap between this section and Section 2 in Lalive and Schmutzler (2008). 6 A summary of the major elements of the reform is Deutsche Bahn AG (1994).…”

Section: The Railway Reformmentioning

confidence: 99%

Entry in Liberalized Railway Markets: The German Experience

Lalive¹,

Schmutzler

2008

Review of Network Economics

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“…6 It shares this feature with Lalive and Schmutzler (2008). Using a difference-in-difference approach, we established a positive relation between competition and the frequency of service for a small subsample of the one we use in this paper.…”

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confidence: 86%

“…We first need a measure of the service quantity on a line. Following Lalive and Schmutzler (2008), we use the frequency of service, the ratio between train kilometers per year (tkm) and the length of a line (lkm). We chose its value in the year 2004 on a particular line as the quantity to be explained, but we also included a lagged frequency of service (for 1994) as a control variable.…”

Section: Datamentioning

confidence: 99%

Auctions vs Negotiations in Public Procurement: Which Works Better?

2015

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Public agencies mainly rely on two modes to procure goods and services: auctions and direct negotiations.We study a 1994 policy change in Germany that introduced the possibility to procure rail services in auctions as well as in direct negotiations with the incumbent. We analyze the effect of the procurement mode on service frequency and procurement price. Our analysis relies on self-collected data on the frequency of rail service on about 500 rail lines. We first develop a theoretical framework to study an agency's decision on the procurement mode. We then use this framework to guide our empirical analysis on rail service, procurement price, and choice of procurement mode. Results indicate that, compared with negotiations, auctions improve service levels and reduce prices. As a result, surplus on auctioned lines increased by about 30%. Interestingly, surplus would also have increased by 16% on negotiated lines had auctions been used. We argue that the predominance of non-competitive modes reflects (actual or perceived) administrative costs of carrying out auctions.

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“…First, we find a substantial negative effect of improved passenger transportation on road accidents. Because road accidents are exclusively the result of road transportation, this finding suggests that increasing the 3 Lalive and Schmutzler (2008a) focuses on the state of Baden-Württemberg, Lalive and Schmutzler (2011) refines the analysis and extends it to the entire country. The authors argue that the correlation between the mode of procurement and the frequency of service can be given a causal interpretation.…”

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confidence: 96%