Deregulation, Competition, and Consolidation: The Case of the German Interurban Bus Industry

We provide an empirical assessment of the German interurban bus industry two years after its deregulation in January 2013. In addition to a general description of key developments of the industry, we use a unique route-level price data set to study both competitive interaction in general and the potential price effects of a recently announced merger of the two largest players in the market in particular. We find that route-level average prices, inter alia, do not only depend on the number of competitors but especially on the composition of firms operating on a particular route. Although our empirical results suggest short-term price increases on certain route types post-merger, it remains an open question whether the merger should be classified as anticompetitive.

Dürr, Niklas, Sven Heim and Kai Hüschelrath (2015), Deregulation, Competition, and Consolidation: The Case of the German Interurban Bus Industry, ZEW Discussion Paper No. 15-061, Mannheim.