Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/30152
Authors: 
Prady, Delphine
Ullrich, Hannes
Year of Publication: 
2010
Series/Report no.: 
ZEW Discussion Papers 10-010
Abstract: 
We analyze the expected effects of building a rail tunnel between Lyon and Turin on i) the market shares of the established and the new suppliers, and ii) consumer surplus. The prospective project consists of a 53km rail tunnel providing freight shippers with a new alpine path. We calibrate an equilibrium model where freight shippers choose a mode and alpine path to ship goods from a given origin to a given destination. Freight carriers strategically set prices for the differentiated products they supply. Deriving the market equilibrium, we simulate the entry of a quality-improved product and test its competitive viability. The prospective alpine path proves both competitive and welfare-enhancing on the regional market, loses its competitive edge on the wider North-South market, and leads to a modal shift on the West-East market. We argue that the new infrastructure is only one tool out of a global modal shift-oriented policy toolbox.
Subjects: 
Transalpine freight
New rail infrastructure
Simulation model
Competition
JEL: 
R41
L92
H54
L13
C63
Document Type: 
Working Paper

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