>Fair enough, though in the long-run your story is pretty superficial.
>The possibility of earning rents if an airport becomes another hub just
>intensifies competition at the "competition *for* the hub" stage of the
>game.
True, but the first round of the game was played before deregulation so before the
value of the hubs was fully realized. Also, being a hub is to some extent a natural
monopoly (big city in the center of the country) and Denver's successful attempt to
enter that market illustrates just how high the barriers to entry are. It took a long
time to work out all the bugs at the new airport there and Denver was already
something of a hub for United even before the large expansion of capacity there. Thus
the explanation may be "superficial," but may be valid for quite some time.
-- Bill Dickens
William T. Dickens
The Brookings Institution
1775 Massachusetts Avenue, NW
Washington, DC 20036
Phone: (202) 797-6113
FAX: (202) 797-6181
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AOL IM: wtdickens
