The allocation of airline take-off and landing slots at crowded airports is an important topic of concern to the air transport industry. A wide variety of different allocation mechanisms are in use, all attempting to balance the interests of airlines, passengers and airports. This paper takes a fresh look at the allocation problem using the tools of transaction cost economics. It develops a model of the decision-making by airlines and airports that provides insight into the rationale behind a range of allocation decisions, including decisions about capacity expansion. It also examines the implications of a number of recent developments in the theory of congestion pricing. Link Gbo4d
The model also has applications in other areas of applied economics, such as the design of monopoly rules or the regulation of competition. The authors illustrate some of these uses with the example of the rules governing hiring into posted job slots. A key insight is that hiring decisions depend on comparative advantage, implying that the likelihood of being hired depends not only on one's own skills but also on the relative abilities of other applicants. This has important implications for the way jobs are allocated in occupations that can be licensed or restricted by law, such as medical doctors, actuaries, lawyers and professors.
In addition, the model is used to examine the effects of allocation policies that might reduce the exploitation of scarcity rents by a single carrier at a given hub. The authors consider a variety of policy options, including the implementation of a slot-specific priority system that is consistent with a range of allocation rules. They conclude that such a policy would reduce the incentive to exploit scarcity rents, but would do so at the expense of other routes that would lose service because capacity is withdrawn from them.
Despite the averments of many critics, there is no evidence that increased hold diminishes players' enjoyment of a game or decreases the time they spend on it. In fact, some scholars have argued that increased hold is necessary to compensate players for the fact that they cannot win as much on any individual spin as they could had there been no hold.
In the final section of this article the authors address the issue of how to manage the consequences of the emergence of a slot machine that offers greater than normal probabilities of winning, a development that some governments are reluctant to allow. This is an important issue, since some states rely on such machines for sin-tax revenue, which currently generates $9bn annually in the United States. The argument against this innovation is that it will encourage gambling addiction and exacerbate problems related to debt culture. The authors argue that the arguments against this technology are flawed and offer proposals for how to avoid these concerns. They also suggest that states might choose to tax the profits of such slot machines in order to recoup some of their costs. This might be the best way to mitigate the exploitation of scarcity rents and protect public welfare.