AbstractGrandfather rights are currently used in the European Union to allocate airport slots. This article shows that airports prefer such a use-it-or-lose-it rule to unconditional property rights. Assuming that there are informational asymmetries between airports and air carriers because air carriers have better information on passenger demand, the use-it-or-lose-it rule increases slot use when demand for air transport is low. Airport profits increase and those of the air carriers, together with social welfare, decrease. The profit-maximizing slot-use ratio is less than one.


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    Title :

    Grandfather rights in the market for airport slots


    Contributors:


    Publication date :

    2009-04-16


    Size :

    9 pages




    Type of media :

    Article (Journal)


    Type of material :

    Electronic Resource


    Language :

    English




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