A diagrammatic analysis of the market for cruising taxis电子书.pdfVIP

Transportation Research Part E 42 (2006) 498–526 /locate/tre A diagrammatic analysis of the market for cruising taxis ´ a,1 ´ a b,* J. Enrique Fernandez L. , Joaquın De Cea Ch , Julio Briones M. a ´ ´ Departamento de Ingenierıa de Transporte, Pontificia Universidad Catolica de Chile, Casilla 306, Santiago 22, Chile b ´ ´ Secretarıa Interministerial de Planificacion de Transporte (SECTRA), Teatinos 950 Piso 16, Santiago, Chile Abstract A diagrammatic approach is used to study the characteristics of the cruising taxi market. For cost mod- eling, both taxi operator and passenger are taken as service producers. The former provides his vehicle operation and the latter, his waiting and travel time. Market demand is defined as a function of generalized price. It is shown that under short and long run conditions a unique equilibrium exists for a deregulated industry and it corresponds to a monopolistic competition. The relations among the free market equilib- rium, social optimum and second best solution are analyzed. Regulations are studied in order to find their social convenience. 2005 Elsevier Ltd. All rights reserved. Keywords: Cruising taxis; Monopolistic competition; Regulation policies 1. Introduction Cruising and dispatch taxi services often coexist, with cruising taxi service predominating in most major cities and in most developing countries.2 Considerable attention has been given in the literature to the economics of cruising tax