Work

Entry in high-speed rail markets: Does multiproduction make a difference?

Year: 2026

Type: article

Abstract: We propose an ex ante evaluation of the effects of a structural change in the rail industry in the presence of vertically differentiated services by considering a multiproduct rail operator. Firstly, rail operators set frequencies and then prices are chosen. Frequencies are viewed by passengers as a quality feature. A flexible cost function accounting for (dis)economies of scope in the supply of high and low quality services for a multi-service operator is assumed. It is shown that the multi-service operator provides more total frequencies than the single-product duopoly when economies of scope are sufficiently important. Also, equilibrium high quality frequency under multi-service monopoly exceeds that under duopoly when the high quality service is relatively more valued than the low quality service. Simulation results for Madrid–Barcelona and Madrid–Valencia line scenarios with a multi-product operator perform better than scenarios with single-product operators; total frequency, consumer surplus and welfare are higher when the relative size of scope economies is sufficiently large.

Source: Research in Transportation Business & Management

DOI: 10.1016/j.rtbm.2026.101748

Authors: Pedro Cantos-Sánchez, Rafael Moner-Colonques, Alba Ruiz-Buforn, Jose J. Sempere-Monerris

Institutions: Universitat de València, UCLouvain

Language: English

Topic: Transport and Economic Policies

Subfield: Strategy and Management

Field: Business, Management and Accounting

Domain: Social Sciences

SDG: Industry, innovation and infrastructure

Open Access status: hybrid

Estimated APC paid: $2,620