“…Another possible measure of market power on the Prague-Ostrava line is the participation in government compensation. Government compensation represents government subsidies to the rail undertakings for transporting seniors and students on the Prague-Ostrava line (the law mandates discounts for students and seniors; these discounts are subsequently reimbursed to rail undertakings by the state; for more information see Tomeš et al, 2022). As shown, in the Figure 4, CD’s participation in government compensation has been decreasing similarly to its market share, while the market shares of its competitors have been significantly increasing .Figure 4.Market share in government compensation. Source : Ministry of Transport of the Czech Republic.…”
After an introduction of competition due to liberalisation, there is an expectation of lower prices and better quality. However, these overall positive effects could be also driven by the incumbent’s incentive to exclude competition within the liberalised markets. Such a situation occurred on the Prague-Ostrava line where liberalisation brought lower prices and an increase in quality. However, it also brought multiple accusations by both the Czech competition authority and the European Commission of the state-owned incumbent, České dráhy, that it had engaged in predatory pricing. This paper then assesses whether the price decreases within this line were driven by actual competition or by predatory behaviour of České dráhy by analysing the position of České dráhy. The aim of this paper therefore is to assess the real market power of the Czech state incumbent, České dráhy, on the Prague-Ostrava line. To achieve this aim, we used unique data we had gathered from our previous research (such as price development, market shares and customer behaviour). Our results then show that it is unlikely that České dráhy could have acted independently of its competitors and customers, which indicates that it could not have had a dominant position.
“…Another possible measure of market power on the Prague-Ostrava line is the participation in government compensation. Government compensation represents government subsidies to the rail undertakings for transporting seniors and students on the Prague-Ostrava line (the law mandates discounts for students and seniors; these discounts are subsequently reimbursed to rail undertakings by the state; for more information see Tomeš et al, 2022). As shown, in the Figure 4, CD’s participation in government compensation has been decreasing similarly to its market share, while the market shares of its competitors have been significantly increasing .Figure 4.Market share in government compensation. Source : Ministry of Transport of the Czech Republic.…”
After an introduction of competition due to liberalisation, there is an expectation of lower prices and better quality. However, these overall positive effects could be also driven by the incumbent’s incentive to exclude competition within the liberalised markets. Such a situation occurred on the Prague-Ostrava line where liberalisation brought lower prices and an increase in quality. However, it also brought multiple accusations by both the Czech competition authority and the European Commission of the state-owned incumbent, České dráhy, that it had engaged in predatory pricing. This paper then assesses whether the price decreases within this line were driven by actual competition or by predatory behaviour of České dráhy by analysing the position of České dráhy. The aim of this paper therefore is to assess the real market power of the Czech state incumbent, České dráhy, on the Prague-Ostrava line. To achieve this aim, we used unique data we had gathered from our previous research (such as price development, market shares and customer behaviour). Our results then show that it is unlikely that České dráhy could have acted independently of its competitors and customers, which indicates that it could not have had a dominant position.
“…Regarding social equity of public transportation services, research is mainly conducted to evaluate the overall service through indicators such as the Gini coefficient or total demand and supply [6,7]. Recently, research has been conducted on partially reducing the fare-free policy's scope to improve sustainability [8,9]. However, in Europe, fare discount policies are provided at a similar level for all public transportation modes, but in Korea, they are provided in a particular form for political reasons.…”
As Korea provides a fare-free policy for subways only, there are objections to geographical equity, and the need to expand it to the entire public transportation system is being discussed. However, expanding policy scope in line with an aging society will soon pose sustainability problems. Hence, policy changes, similar to that of countries that provide fare-discount policies for the elderly or apply different discount rates for each travel mode, are needed. However, providing the same policies for all cities may differ from the benefits the target group wants. Thus, this study investigated the preference of the elderly living in major cities in South Korea for discount policies by travel mode. The study aims to provide a strategy for choosing the travel mode that should provide discount policies by combining regional and individual attributes. The latent class model is employed to classify stated preference data collected from the survey. The estimation results show a significant preference heterogeneity depending on the level of subway supply by region, and a policy focused on subways would be more reasonable in cities with sufficient subway infrastructure. In addition, providing additional bus discount policies only for trunk lines will help improve sustainability.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.
