Product Unbundling in the Travel Industry: The Economics of Airline Bag Fees

E-print/Working paper (2013)

This paper provides theory and evidence on airline bag fees, offering insights into a real-world case of product unbundling. The theory predicts that an airline’s fares should fall when it introduces a ... [more ▼]

This paper provides theory and evidence on airline bag fees, offering insights into a real-world case of product unbundling. The theory predicts that an airline’s fares should fall when it introduces a bag fee, but that the full trip price (the bag fee plus the new fare) could either rise or fall. The empirical evidence presented in the paper provides strong confirmation of this prediction. The data also suggest that the average fare falls by less than the bag fee itself, so that the full price of a trip rises for passengers who choose to check bags. [less ▲]

Patent Office Governance and Patent System Quality

in Journal of Public Economics (2013), 104

The present paper discusses the role of quality in patent examination process from the perspective of patent offices' behavior and organization. After documenting original stylized facts, the paper ... [more ▼]

The present paper discusses the role of quality in patent examination process from the perspective of patent offices' behavior and organization. After documenting original stylized facts, the paper presents a model in which patent offices set patent fees and the quality level of their examination process. A higher effort in the examination process enhances the patent holders' protection in the judicial system and strengthens the screening of innovations with small inventive steps. We compare the quality of the examination process for various objectives of patent offices. Patent examination quality is the highest in an office maximizing incentives to innovate and the lowest in that maximizing the number of granted patents. A rent-seeking patent office can provide good incentives to innovate if it does not set too high markups on fees. [less ▲]

Social interactions, social capital and urban structure

Presentation (2013, July)

Airline Alliances, Carve-Outs and Collusion

in Review of Network Economics (2013), 12(2), 211

In this paper, we ask how antitrust immunity subject to a carve-out affects collusion incentives in international airline alliances. We show that the gains from economies of density due to higher ... [more ▼]

In this paper, we ask how antitrust immunity subject to a carve-out affects collusion incentives in international airline alliances. We show that the gains from economies of density due to higher interline traffic under the alliance strengthen the incentive to collude on the interhub route, while the accompanying revenue gain heightens the incentive to defect from collusive behavior. These two effects exactly cancel in the case of linear demand and linear economies of density. Under this approximation, the incentives for interhub collusion are no different before and after the formation of an airline alliance subject to a carve-out. [less ▲]

Commodity taxation and regulatory competition

Presentation (2013, February 28)

State owned firms: private debt, cost revelation and welfare

Presentation (2013, February)

A Theory of BOT concession contracts

in Journal of Economic Behavior and Organization (2013), 89

In this paper, we discuss the choice for build-operate-and-transfer (BOT) concessions when governments and Örm managers do not share the same information regarding the operation characteristics of a ... [more ▼]

In this paper, we discuss the choice for build-operate-and-transfer (BOT) concessions when governments and Örm managers do not share the same information regarding the operation characteristics of a facility. We show that larger shadow costs of public funds and larger information asymmetries entice governments to choose BOT concessions. This result stems from a trade-o§ between the governmentís shadow costs of Önancing the construction and the operation of the facility and the excessive usage price that the consumer may face during the concession period. The incentives to choose BOT concessions increase as a function of informational asymmetries between governments and potential BOT concession holders and with the possibility of transferring the concession project characteristics to the public authority at the termination of the concession. [less ▲]

Spatial segregation and urban structure

Presentation (2013)

Spatial Segregation and Urban Structure

E-print/Working paper (2013)

In this paper, we study social interactions between two populations of individuals living in a city. Agents consume land and benefit from intra- and inter-group social interactions. We show that in ... [more ▼]

In this paper, we study social interactions between two populations of individuals living in a city. Agents consume land and benefit from intra- and inter-group social interactions. We show that in equilibrium segregation arises: populations get separated in distinct spatial neighborhoods. Two- and three-district urban structures are characterized. For high population ratios or strong inter-group interactions, only a three-district city exists. In other cases, multiplicity of equilibria arises. Moreover, for sufficiently low population ratios or very weak inter-group interactions, all individuals agree on which spatial equilibrium is best. [less ▲]

The economics of airport noise: how to manage markets for noise licenses

in Transportation Research. Part D : Transport and Environment (2012), 17(2), 169-178

Noise-induced pollution constitutes a hot and topical societal problem for all major airports. This paper discusses various issues in the implementation of a market for noise licenses as a solution to ... [more ▼]

Noise-induced pollution constitutes a hot and topical societal problem for all major airports. This paper discusses various issues in the implementation of a market for noise licenses as a solution to solve the noise externality between the residents located around airports and the aircrafts moving in and to airports. [less ▲]