Effects of bus-based disruptive business models with limited capacity on rail monopolies: Social welfare implications

Long distance passenger transport markets are facing important changes as new entrants, e-Platform based bus services retailer (PBSR) operators, are challenging the railway incumbents applying judo economic strategies. Traditionally, European policymakers tended to favour railway services over road services in the long-haul markets, often leading the rail operators in monopolistic-alike positions. Recently, several countries deregulated their national intercity bus markets, gradually introducing intermodal competition in the sector. The competition led to important improvements in service quality, but it also had negative impacts on rail operators’ profitability, especially after PBSR operators started to work, due to their disruptive business model based on aggregative online platforms and production externalization. PBSR companies (e.g. Flixbus, BlaBlaBus) are characterized by high flexibility and low production costs, which use as advantage against the incumbents. The rail operators are instead characterized by high indivisibility, high production costs and, usually, big sizes. Losses in either revenues or market shares could easily force them into reducing services quantity or even exit the market. Our paper aims to analyse these new competitive relations in the intercity intermodal market, focusing on resulting impacts on market shares, demand satisfaction and social welfare. Since the bus operators present limited capacity due to technical feasibility (e.g. minimum headway) and the need to limit road congestion (to preserve service quality), the mobility right fulfilment is put in jeopardy. We modelled the competitive relations through game theory, excluding high speed rail from the perimeter to preserve service comparability. Profit levels and optimal social welfare are then studied through simulations. Results confirm that for increasing PBSR production capacity, railway operators tend to have fewer profits or be forced to leave the market, resulting in unsatisfied demand. Furthermore, from a social point of view, the rail monopoly seems to be, under specific circumstances, preferred to a duopoly

Strategic formation and welfare effects of airline-high speed rail agreements

Policy makers encourage airline-high speed rail (HSR) cooperation to promote intermodal passenger transport. We study the strategic formation of airline-HSR partnerships (depending on sunk costs and firms’ bargaining power) and their effects on consumer surplus and social welfare. We assume that airline-HSR agreements serve to offer a bundle of domestic HSR and international air services. In a capacity purchase (CP) agreement, the airline buys train seats to sell the bundle, whereas in a joint venture (JV) agreement firms create a distinct business unit. We find that both agreements increase traffic in the network, and thereby may not reduce congestion at hub airports. We provide antitrust authorities with a simple two-tier test for the CP agreement to improve consumer surplus. Contrary to airline-HSR mergers, the JV agreement benefits consumers independent of hub congestion and mode substitution. Simulation results show that, in case of cooperation, public agencies should prefer firms to create a JV, unless the related sunk costs are far greater than the costs of the CP agreement

AIRO Breast Cancer Group Best Clinical Practice 2022 Update

Introduction: Breast cancer is the most common tumor in women and represents the leading cause of cancer death. Radiation therapy plays a key-role in the treatment of all breast cancer stages. Therefore, the adoption of evidence-based treatments is warranted, to ensure equity of access and standardization of care in clinical practice.Method: This national document on the highest evidence-based available data was developed and endorsed by the Italian Association of Radiation and Clinical Oncology (AIRO) Breast Cancer Group.We analyzed literature data regarding breast radiation therapy, using the SIGN (Scottish Intercollegiate Guidelines Network) methodology (www.sign.ac.uk). Updated findings from the literature were examined, including the highest levels of evidence (meta-analyses, randomized trials, and international guidelines) with a significant impact on clinical practice. The document deals with the role of radiation therapy in the treatment of primary breast cancer, local relapse, and metastatic disease, with focus on diagnosis, staging, local and systemic therapies, and follow up. Information is given on indications, techniques, total doses, and fractionations.Results: An extensive literature review from 2013 to 2021 was performed. The work was organized according to a general index of different topics and most chapters included individual questions and, when possible, synoptic and summary tables. Indications for radiation therapy in breast cancer were examined and integrated with other oncological treatments. A total of 50 questions were analyzed and answered.Four large areas of interest were investigated: (1) general strategy (multidisciplinary approach, contraindications, preliminary assessments, staging and management of patients with electronic devices); (2) systemic therapy (primary, adjuvant, in metastatic setting); (3) clinical aspects (invasive, non-invasive and micro-invasive carcinoma; particular situations such as young and elderly patients, breast cancer in males and cancer during pregnancy; follow up with possible acute and late toxicities; loco-regional relapse and metastatic disease); (4) technical aspects (radiation after conservative surgery or mastectomy, indications for boost, lymph node radiotherapy and partial breast irradiation).Appendixes about tumor bed boost and breast and lymph nodes contouring were implemented, including a dedicated web application. The scientific work was reviewed and validated by an expert group of breast cancer key-opinion leaders.Conclusions: Optimal breast cancer management requires a multidisciplinary approach sharing therapeutic strategies with the other involved specialists and the patient, within a coordinated and dedicated clinical path. In recent years, the high-level quality radiation therapy has shown a significant impact on local control and survival of breast cancer patients. Therefore, it is necessary to offer and guarantee accurate treatments according to the best standards of evidence-based medicine

How does vertical industry structure affect investment in infrastructure quality?

If the access network is an economic bottleneck, then the regulator may consider vertical separation of the telecommunications incumbent. There is the concern that separation dilutes quality-enhancing network investment, and social welfare. We show that, despite some loss of operational coordination and potential hold-up problems, vertical separation may raise investment and welfare compared with integration. While structural more than functional separation raises investment, it is functional more than structural separation that raises welfare (due to investment cost). The results obtained shed light on the effects of different forms of separation on the incentive to build-out Next Generation Access networks (NGA

Co-investment in ultra-fast broadband access networks: Is there a role for content providers?

In many countries, Next Generation Access networks (NGA) deployment and penetration rate proceed at a slower pace than expected. It is argued that an ex ante contractual arrangement among residential-access Internet Service Providers (ISPs) and Content Providers (CPs), which builds on the complementarity between infrastructure and content, can promote the roll out of NGA. Indeed, one such contract brings down the portion of the investment cost borne by the ISPs (for a given cost of investment), increases end users' demand for improved connectivity and internalizes investment externalities. It is studied how a departure from network neutrality (NN) regulation of the Internet, allowing the ISP to negotiate with the CP a fee for (priority) delivery of content, affects firms' investment incentives. Using a simple model, it is shown that the ISP may invest more with than without NN, since the CP may have high bargaining power ex post (after NGA investment is sunk). Instead, the CP may be more willing to co-invest when NN is abandoned, either to evade high ex post fees (if the investment cost is low), or to foster NGA deployment (if the investment cost is high and the ISP has low bargaining power ex post)