Project description
New techniques for understanding airport capacity problems
Our economy has become increasingly reliant on auctions to allocate scarce resources, using auction models to understand competition in bidding markets. Unfortunately, these models are built on traditional auction analysis, which is limited to existing mechanisms and reliant on bid data to deduce firms’ latent values, significantly reducing their accuracy and efficiency. The ERC-funded APCAP project aims to research the welfare effects of implementing auctions in new markets, bridging disconnected strands of research in industrial organisation and utilising various angles of study to understand and overcome challenges such as the pressing airport capacity problem. The project will develop novel structural models and estimation techniques to detect previously ignored complexities and differential impacts.
Objective
Our economy relies on auctions to efficiently allocate scarce resources, and we use auction models to understand competition in bidding markets. However, traditional auction analysis is limited to existing mechanisms as it relies on bid data to estimate firms' latent values. Instead, APCAP proposes to study the welfare effects of implementing auctions in new markets. Auction values are characterized based on the profits generated from auctioned items and can be estimated using appropriate demand and supply models, bridging two disconnected strands of research in Industrial Organization. This idea is used to study various angles of the pressing airport capacity problem and how to best allocate scarce airport slots to competing airlines. New structural models and estimation techniques are developed to capture the complexities of this issue, made possible by unique access to highly detailed datasets.
- Project 1 considers the endogenous formation of a product network with spillovers in costs and demand (to quantify how airlines respond to shocks) and shows how to estimate such a model when entry barriers constrain the observed network. The model estimates highlight the role of capacity constraints in network formation and help understand the competitive pressure of low-cost carriers in slot auctions.
- Project 2 captures the differential impacts of extending vs. optimizing existing airport capacity while endogenizing the intensive margin of delays, flight cancellations, and emissions. An estimation strategy is developed to estimate demand when observing only aggregate prices.
- Project 3 estimates the magnitude and drivers of slot synergies and uses computer science techniques to assess the welfare impacts of large-scale slot auctions.
- A transversal project leverages these methods and data to provide insight into the understudied European airline industry, as well as how auction impacts vary depending on the market structure and (demand) factors local to an airport.
Fields of science (EuroSciVoc)
CORDIS classifies projects with EuroSciVoc, a multilingual taxonomy of fields of science, through a semi-automatic process based on NLP techniques. See: The European Science Vocabulary.
CORDIS classifies projects with EuroSciVoc, a multilingual taxonomy of fields of science, through a semi-automatic process based on NLP techniques. See: The European Science Vocabulary.
- engineering and technology electrical engineering, electronic engineering, information engineering information engineering telecommunications telecommunications networks data networks
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Keywords
Project’s keywords as indicated by the project coordinator. Not to be confused with the EuroSciVoc taxonomy (Fields of science)
Project’s keywords as indicated by the project coordinator. Not to be confused with the EuroSciVoc taxonomy (Fields of science)
Programme(s)
Multi-annual funding programmes that define the EU’s priorities for research and innovation.
Multi-annual funding programmes that define the EU’s priorities for research and innovation.
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HORIZON.1.1 - European Research Council (ERC)
MAIN PROGRAMME
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Topic(s)
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Calls for proposals are divided into topics. A topic defines a specific subject or area for which applicants can submit proposals. The description of a topic comprises its specific scope and the expected impact of the funded project.
Funding Scheme
Funding scheme (or “Type of Action”) inside a programme with common features. It specifies: the scope of what is funded; the reimbursement rate; specific evaluation criteria to qualify for funding; and the use of simplified forms of costs like lump sums.
Funding scheme (or “Type of Action”) inside a programme with common features. It specifies: the scope of what is funded; the reimbursement rate; specific evaluation criteria to qualify for funding; and the use of simplified forms of costs like lump sums.
HORIZON-ERC - HORIZON ERC Grants
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Call for proposal
Procedure for inviting applicants to submit project proposals, with the aim of receiving EU funding.
Procedure for inviting applicants to submit project proposals, with the aim of receiving EU funding.
(opens in new window) ERC-2025-STG
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Net EU financial contribution. The sum of money that the participant receives, deducted by the EU contribution to its linked third party. It considers the distribution of the EU financial contribution between direct beneficiaries of the project and other types of participants, like third-party participants.
3000 Leuven
Belgium
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