Crossing Øresund : A case study of price discrimination on Øresund Bridge

The purpose of this thesis is to investigate the competition structure in the market for crossing Øresund and which price setting techniques are used. The results show that the market for crossing Øresund Bridge is monopolistically competitive market. While Øresund Bridge can in some cases be seen as a monopoly. Furthermore the results show how the firms that are operating in the market offer their consumers various pricing schedules to self-select from. The results based upon the information collected found that Øresund Bridge uses price discriminatory pricing schedules such as two-part tariff, quantity discount and peak-load pricing. According to the theory of price discrimination the firm needs to have market power in order to price discriminate and it is found that Øresund Bridge have a market share of 76%. The negative consequences of price discrimination in the particular market can mostly be seen in the ferry market where the two largest firms have to start collaborating in order to sustain as a part of the market. The positive consequences is found to be that a wider range of consumer groups are able to travel over Øresund due to the extensive range of different prices offered by the market operators

Crossing Øresund : A case study of price discrimination on Øresund Bridge

The purpose of this thesis is to investigate the competition structure in the market for crossing Øresund and which price setting techniques are used. The results show that the market for crossing Øresund Bridge is monopolistically competitive market. While Øresund Bridge can in some cases be seen as a monopoly. Furthermore the results show how the firms that are operating in the market offer their consumers various pricing schedules to self-select from. The results based upon the information collected found that Øresund Bridge uses price discriminatory pricing schedules such as two-part tariff, quantity discount and peak-load pricing. According to the theory of price discrimination the firm needs to have market power in order to price discriminate and it is found that Øresund Bridge have a market share of 76%. The negative consequences of price discrimination in the particular market can mostly be seen in the ferry market where the two largest firms have to start collaborating in order to sustain as a part of the market. The positive consequences is found to be that a wider range of consumer groups are able to travel over Øresund due to the extensive range of different prices offered by the market operators