04 - Theory of Organization and Supply Regulation - DME
04 - Theory of Organization and Supply Regulation - DME
Integration or fragmentation
Levels of organization
Every transportation system can be thought of being made up of 3 levels:
- #Infrastructure level
- [[#Info structure level]]
- [[#Service level]]
Infrastructure level
The infrastructure level is the most material and physical part of a transportation system
- In a road, the infrastructure would be the road itself
- In a railway, the infrastructure would be the rail tracks, the ballast,...
Info structure level
The info structure is the part of the transportation system that ensures the safe and optimized use of the [[#Infrastructure level]].
It could be:
- Traffic signaling on roads
- Signaling on rails
- Air traffic control
- ...
Service level
The service level is the part of a transportation system that touch the final consumer. It's what it purchased by the final consumer and is characterized by price, frequency and quality of service.
Coordination
The 3 [[#Levels of organization]] can be articulated in several ways.
- Each level is managed by different operators
- Same operators for 2 f the 3 individual levels
- Different enterprises working together
Perfect and imperfect competition
Perfect competition
A market with perfect competition has to meet the following criteria:
- No one has market power - Price is defined by the market
- All competitors and user have perfect information
- Markets are complete (there is a market for each good and consumers willing to pay the marginal cost of producing them)
- Markets are flexible
In a perfect competition, there are infinitly many agents all infinitly small.
In reality though, there usually only is [[#Imperfect competition]]
Imperfect competition
Imperfect competition is one where there is no [[#Perfect competition]]. There can be 3 types of imperfect competition:
Monopolistic competition
In a monopolistic competition there are several agents making the same product but each have they're unique characteristic. (ex: many companies making phones, but the phones are all different).
Oligopoly
In a oligopoly there are only a few agents providing the same product or service.
(ex. Car companies, regional airlines,...)
Monopoly
In a monopoly, there is only 1 single agent providing one product or service