Vertical Differentiation

This paper develops a model of price competition between two international airline alliances, with consumers' preferences vertically differentiated by the number of stops. Alliances benefit the interline passengers. Alliances with antitrust immunity do not benefit interline passengers more than those without antitrust immunity, in contrast to the Cournot-type settings. While antitrust immunity leads to higher fares for non-stop travel between hubs of alliance partners, granting it might be necessary to induce consolidation between carriers. Formation of alliances with antitrust immunity is consistent with the proposed model, even though such is likely to decrease individual carriers' profit.

In this paper, we examine national conditions that encourage the growth of a private regulatory environmental system to govern forests. Economic, institutional and social capital variables for 117 countries are used to examine factors determining forest certification under the Forest Stewardship Council and domestic competitor schemes. Although economic factors, such as forest exports and GDP, are important in explaining the likelihood that a country's forest management practices are certified, the regression results support the idea that economic institutions and the social context under which firms and forest landowners seek certification matters. The ability of citizens to influence the political process is also significant; in particular, the likelihood that firms and forest owners will seek to certify their forest practices is significantly reduced if women have little or no effective voice in civil society. D

Sur le marché des semi-conducteurs, deux géants se livrent une bataille féroce : Intel et AMD (Advance Micro Devices). Nous nous intéressons dans cet article à la compétition au sein du marché de microprocesseur de type x86 entre ces deux seuls joueurs en place. Nous exposons les grandes lignes de l’historique des firmes, la structure de secteur et les comportements concurrentielles entre les firmes. Un modèle simple est construit pour démontrer sur quelle mesure la différenciation verticale va impacter les caractéristiques de l’équilibre.

The concept of polycentric development has emerged as one of the hallmarks of the emerging field of European spatial planning. It was one of the key principles in the European Spatial Development Perspective (ESDP), it has been frequently debated by academics, and it has been invoked by those engaged in spatial development policy making across the scales of multi-level governance in Europe. The concept is subject to multiple interpretations. This article argues that as well as being differentiated by spatial scale (vertical differentiation), the concept can also be differentiated horizontally by context. It is currently being interpreted and employed in at least three domains of meaning: in the emerging field of transnational spatial planning for Europe; in the practice of spatial development policy making at the various levels of multi-level territorial governance within Europe where planning occurs; and in an emerging academic discourse relating to European spatial planning. The article then focuses on the second domain where polycentricity is employed and has meaning ascribed to it, through a consideration of how the concept has been interpreted and applied in recent spatial planning initiatives in England. The article concludes that further 'bottom-up' comparative research and analysis is key to future research into the concept of polycentricity in European spatial planning.

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As was shown in some previous studies, the creation of the North American Free Trade American (NAFTA) has significantly increased trade and investment flows between member countries. Consequently, it seems appropriate to analyze the incidences of the free trade agreement on the nature of trade. In this paper, we study the intra-industry trade in the automobile industry within the NAFTA area. Our results highlight an increase in intra-industry trade since the beginning of the 1990s. The importance of intra-industry trade is evaluated with the Grubel and Lloyd indicator (1975)

In this article, we try to elicit whether an information on food safety is consistent with a more environmental-friendly agriculture. As the policy makers generally intervene to limit negative externalities in agriculture on the supply side, is a labelling policy an efficient way to reduce pollution levels in this sector? The intuitive reason of a food safety label rests on the fact that consumers seem to be more concerned with information on food safety aspects than on environmental ones. In a vertical differentiation model, we analyse the impacts of labels mentioning food safety and environmental aspects, on firms' profits, consumers' surplus and pollution levels. Given our main assumption that food safety and environmental consequences are directly linked, our principal results show that a labelling policy on food safety can be efficient from an environmental point of view, depending on the initial healthy products proportion in the market. Another result is based on the fact that a label policy can reduce consumer's surplus.

Film is an example par excellence of a product that is vertically differentiated, in that although each film is unique in some respects in relation to other films, they are not of equal attractiveness to audiences, perhaps because each member of an audience is a unique individual, which results in variations of taste over the ensemble of filmgoers. The industrial

We consider two firms introducing vertically differentiated products to a market ruled by the consumers’ willingnessto-pay. If consumers behave indifferently to all the products, they would always choose the product which offers highest net utility. The paper considers a more realistic case in which high utility products do not necessarily satisfy the consumers who are sensitive to price enhancements. They are eager to analyze whether choosing a new entrant offering higher quality products is worth the price. In such a setup, competing firms offering vertically differentiated products could employ cooperative bundles. By introducing new products in stages, we show that the market gets divided based on consumers’ willingness to pay more for an expensive product. We have employed computational method on a newly built coopetition model. Our results show that cross bundling can improve both sellers’ profits, also leading to a boost in the entrant’s position in the market. In fact, the applied strategy of simultaneous cooperation and competition in this paper shows that, coopetition drives consumers’ attention to purchase cross-bundles instead of individual products or direct bundles, which in the end benefits both firms. Also it is shown that previous solutions are not necessarily optimal for duopolies practicing coopetition.

This study identifies country and industry-level determinants of intra-industry trade (IIT) between the United States and developing countries. IIT is found to decline with greater differences in relative factor endowments. Economic size and trade orientation of the ...

In this paper, we examine national conditions that encourage the growth of a private regulatory environmental system to govern forests. Economic, institutional and social capital variables for 117 countries are used to examine factors determining forest certification under the Forest Stewardship Council and domestic competitor schemes. Although economic factors, such as forest exports and GDP, are important in explaining the likelihood that a country's forest management practices are certified, the regression results support the idea that economic institutions and the social context under which firms and forest landowners seek certification matters. The ability of citizens to influence the political process is also significant; in particular, the likelihood that firms and forest owners will seek to certify their forest practices is significantly reduced if women have little or no effective voice in civil society. D

This thesis investigates the relationship between the distribution of non-European Union (EU) international students across the UK higher education sector and the characteristics of UK higher education institutions (HEIs) and the strategies they may pursue to make their provision more attractive to non-European Union (EU) international students. It looks at how this relationship has evolved since 1995/96, analysing the recruitment patterns of individual HEIs in relation to policy changes that may impact the number of students coming to UK higher education from outside the EU. To do so, I analyse an exceptionally large dataset, produced by UK’s Higher Education Statistics Agency (HESA), containing information on over 35 million higher education students covering a 22-year period. This study represents the first systematic longitudinal analysis of recruitment patterns of non-EU international students in UK HEIs for the past two decades. My analysis shows that UK institutional hierarchies play a pivotal in explaining the uneven distribution of non-EU internationals students across HEIs, particularly in policy environments that seek to restrict mobility. Understanding this unevenness is critical considering the terms in which non-EU international students are recruited in UK higher education. This subset of students represents a substantial resource –both financial and symbolic– in the sector, as they tend to pay higher fees than their domestic counterparts and are perceived as a marker of institutional prestige, as attested in some global league tables. Thus, the observed inequalities between institutions in terms of their shares of students who are non-EU international –with more prestigious HEIs overwhelmingly having higher shares– contribute to longstanding resource and prestige disparities in UK higher education. Moreover, this thesis investigates whether the position of universities within UK institutional hierarchies allows us to understand the strategies HEIs pursue to make their provision more attractive to non-EU international students. Drawing from the Bourdieusian concept of ‘field of power’ (1993) and its development by Marginson (2008), I argue that the position of a given  university in a hierarchy will shape their ‘space of possibles’ (Bourdieu 1993: 30; Marginson 2008: 307), that is the strategies that they may follow to successfully recruit non-EU international students. Previous research suggests that universities that recruit non-EU international students as a result of marketising their educational offering to a global audience, pitch their products to particularly lucrative markets, which results in certain institutions having particularly high concentrations of certain nationalities in certain subjects (Findlay et al. 2017). However, as I show in this thesis, the extent to which HEIs engage in these practices vary depending on their position in UK’s institutional hierarchy.

Montréal. Il a pour mission la promotion et la valorisation de la recherche. Érudit offre des services d'édition numérique de documents scientifiques depuis 1998. Pour communiquer avec les responsables d'Érudit : erudit@umontreal.ca Article Christos Constantatos et Stylianos Perrakis L'Actualité économique, vol. 71, n° 1, 1995, p. 71-98. Pour citer cet article, utiliser l'adresse suivante : http://id.erudit.org/iderudit/602167ar Note : les règles d'écriture des références bibliographiques peuvent varier selon les différents domaines du savoir. Ce document est protégé par la loi sur le droit d'auteur. L'utilisation des services d'Érudit (y compris la reproduction) est assujettie à sa politique d'utilisation que vous pouvez consulter à l'URI http://www.erudit.org/apropos/utilisation.html Document téléchargé le 9 July 2011 12:49 « Différenciation verticale et structure du marché » L'Actualité économique, Revue d'analyse économique, vol. 71, n° 1, mars 1995 Différenciation verticale et structure du marché* Christos CONSTANTATOS Département d'économique Université Laval GREEN Stylianos PERRAKIS Faculté d'administration Université d'Ottawa

This paper tests industry-specific hypotheses of the determinants of intra-industry trade in the context of Australia-UK trade. In doing so it separates intra-industry trade (IIT) into IIT in horizontally differentiated products and IiT in vertically differentiated products. It finds that the latter is the dominant former of IIT. Further the paper investigates the robustness of empirical results on testing industry-specific hypotheses to the choice of national (UK or Australian) industrial structure characteristics. The assumption of uniform industrial structures across countries adopted in other studies is shown not to be justified. 1987). This is a major shortcoming which has not been addressed. A final criticism of earlier cross-2% for example Leamer (1994). Gnxnaway and Milner (1987) and Greenaway and Tontensson (1997).

We adopt a vertical differentiation model to study the effect of deregulation in the airline industry. In particular, we show that traditional carriers form international alliances on hub-and-spoke networks to compete against low cost companies, which successfully serve short haul routes at relatively cheap prices. The alliance is profitable if the gain in terms of economies of density is sufficiently high and consumers' utility is not significantly decreased by the indirect connection. Social welfare is also evaluated: we find interval regions where the alliance is welfare enhancing, even if it is not convenient for existing flag carriers.

This paper addresses the question of how the vertical structure of a product line relates to brand equity. Does the presence of "premium" or high-quality products in a product line enhance brand equity? Conversely, does the presence of "economy" or low-quality products in a product line diminish brand equity? Economists and marketing researchers refer to variation in quality levels of products within a category as "vertical" differentiation, whereas variation in the function or "category" of the products is referred to as "horizontal" differentiation. Much of the existing research on the relationship between product line structure and brand equity has focused on the horizontal structure of the product line and has been primarily concerned with brand extensionswhat happens when the product line of a brand is extended horizontally into new categories? Researchers have been concerned primarily with how the extension fares, but the effect of the extension on the core products is also important. There is an analogous question of what happens when the product line of a brand is extended vertically, either "up market" or "down market." This question of vertical extensions is part of the more general issue of how the vertical structure of a product line relates to brand equity.

With higher shares in world merchandise trade and improvements in product quality, China is better positioned than India in the near term for influencing global trade. From the Malaysian perspective, China represents a non-negligible share in Malaysia's trade. The trends in bilateral trade with both Giants however suggest that competition has intensified. Relative to India, China appears to promulgate a more influential role on Malaysia via higher commodity overlap in external markets, greater matched trade that is of vertical differentiation, distinct quality shifts and negative adjustment pressures. Within this broad rubric of trade-induced changes, there is no evidence of skill upgrading for Malaysia in trade expansion with both Giants. This mirrors the lack of product quality improvements and the low levels of export values of high quality varieties in matched trade. Hence trade induced changes from the Giants that have been cited to be favourable from the Malaysian perspective in previous studies, may have been grossly overstated.

We document the evolution of product innovation and features in the mobile telephone handset market. We distinguish between two types of product innovation: vertical and horizontal innovation. Using data from 1990 -2003, we find that some characteristics have subsequently become an industry standard, while some remained as horizontally differentiating features of mobile handsets. We explain this pattern using the concept of dominant design, and results from the theoretical literature on the incentives for horizontal and vertical differentiation.

Our analysis is motivated by cases of cigarette smuggling in Canada and in the UK. In the 1990s, domestic cigarettes were legally exported to be subsequently illegally imported. At first, smuggling was done by individual consumers who bought cigarettes abroad and brought them back through policed points of entry. This Mom and Pop smuggling was a mechanism to implement a second-degree price discrimination scheme by cigarette manufacturers. Regrets from committing tax evasion and labels on exported cigarettes packs permit vertical differentiation of illegal and legal cigarettes. Paradoxically, labeling measures can make illegal sales more resilient to tax reductions, and stricter border enforcement encourages a switch to a less benign smuggling technology exclusive to criminal organizations. High export taxes terminated export-to-smuggle schemes, but brought about a surge of counterfeit cigarettes. Because of a second-degree price discrimination scheme, the elimination of taxes need not suffice to eradicate smuggling. Copyright © 2009 The Authors. Journal compilation © 2009 Blackwell Publishing Ltd.

In a lysimeter experiment with juvenile beech trees (Fagus sylvatica L.) we studied the development of depth gradients of soil organic matter (SOM) composition and distribution after soil disturbance. The sampling scheme applied to the given soil layers (0-2 cm, 2-5 cm, 5-10 cm and 10-20 cm) was crucial to study the subtle reformation of SOM properties with depth in the artificially filled lysimeters. Due to the combination of physical SOM fractionation with the application of 15 N-labelled beech litter and 13 C-CPMAS NMR spectroscopy we were able to obtain a detailed view on vertical differentiation of SOM properties. Four years after soil disturbance a significant decrease of the mass of particulate OM (POM) with depth could be found. A clear depth distribution was also shown for carbon (C) and nitrogen (N) within the SOM fractions related to bulk soil. The mineral fractions <63 µm clearly dominated C storage (between 47 to 60% of bulk soil C) and N storage (between 68 to 86% of bulk soil N). A drastic increase in aliphatic C structures concomitant to decreasing O/N-alkyl C was detected with depth, increasing from free POM to occluded POM. Only a slight depth gradient was observed for 13 C but a clear vertical incorporation of 15 N from the applied labelled beech litter was demonstrated probably resulting from faunal and fungal incorporation. We clearly demonstrated a significant reformation of a SOM depth profile within a very short time of soil evolution. One important finding of this study is that especially in soils Plant Soil (

We analyse positional effects in a monopoly market with vertical differentiation, comparing monopoly and social planning. The provision of quality under monopoly depends upon the relative size of positional effects and the hedonic evaluation of quality. An elitarian equilibrium where quality increases in the level of positional concern emerges under monopoly, only if the market is sufficiently rich. Under social planning, quality increases in the level of positional externality, independently of market affluency. As long as partial market coverage obtains under both regimes, the monopoly deadweight loss decreases as the positional externality becomes more relevant. 1 The linear model of horizontal differentiation with convex transportation costs is a special case of a vertical differentiation model with quadratic costs of quality improvements . Moreover, as in , if firms are allowed to locate also outside the linear segment along which consumers are distributed, then there exist location pairs giving rise to vertical differentiation . 2 The behaviour of a monopolist in a market where buyers' satisfaction increases in the number of consumers excluded from purchase is analysed in , who suggests that the positional concern may be traced back to either quality signalling by the firm or status seeking by consumers.

Ultramafic rocks cover about 1% of the continental surfaces and are related to ophiolitic bodies formed near convergent plate boundaries (Coleman, 1977). The most typical ultramafic rocks are dunite and harzburgite, which are composed of easily weatherable ferromagnesian mineral species (olivines and pyroxenes), but also of more resistant spinels (chromite and magnetite). Oceanic serpentinization of these ultramafic rocks usually lead to partial transformation of these initial mineral assemblages by forming hydrous layer silicates such as serpentine (lizardite, chrysotile and antigorite) talc, chlorite and actinolite (Malpas, 1992). It also lead to the formation of highly sheared textures, which favor meteoric weathering through preferential water flows. Compared to their crystalline rock counterpart that covers most of the continental surfaces, these ultramafic rocks mainly differ by their lower SiO2, Al2O3 and K2O contents (less than 50%, 10% and 1%, respectively) and, on the oppo...

In this paper we combine qualitative and quantitative analyses to understand the evolution of productivity in the Colombian hotel sector. We use firm-level data to calculate total factor productivity (TFP) based on revenues and quantities, and we evaluate the role played by misallocation of resources and other factors in aggregate productivity level and growth. We measure the distortions faced by firms that impede an adequate reallocation and higher aggregate productivity levels. Through qualitative sources we explain these distortions as well as other restrictions that hamper efficiency improvements. We find that in a sector with high levels of vertical differentiation it is difficult to determine the evolution of productivity because quality differences and demand shocks simultaneously affect prices, making hard to isolate productivity from non-productivity related changes. Nonetheless, there is significant productivity dispersion and there are strong and stable market distortions that prevent firms from attaining their optimal size, according to their efficiency level. These distortions are affecting aggregate productivity of the sector, and eliminating them could increase hotel sector production around 13% under a conservative scenario based on 2006, and up to 70% under the assumption of less product differentiation.

The aim of this study was to characterize the relation of dimensional changes of dental ceramic materials as function of temperature. The thermal dimensional behavior of one glass ceramic core, four commercially available veneering porcelains and two experimental veneering porcelain materials was determined on cooling from 450 C to 20 C by means of a vertical differential pushrod thermal dilatometer. The thermal dimensional behavior of the ceramic materials was expressed in three different ways: as linear relation with a linear line fitting procedure; as non-linear relation by a quadratic curve fitting procedure and according to ISO 9693 by a thermal expansion coefficient. For all ceramic materials except the one consisting of aluminum oxide fillers, the thermal dimensional behavior is best described with the polynomial function: Dl=l ¼ C þ a 1 T þ a 2 T 2 : The description of the thermal expansion coefficient according to the ISO standard on metal is not appropriate for the prediction of a thermal incompatibility of ceramic materials. Except for Vitadur Alpha, the ceramics materials tested showed non-linear expansion; their thermal dimensional behavior can be best described according to the quadratic relation method, second by the linear relation, third as recommended by ISO. r

We formulate higher order variations of a Lagrangian in the geometric framework of jet prolongations of fibered manifolds. Our formalism applies to Lagrangians which depend on an arbitrary number of independent and dependent variables, together with higher order derivatives. In particular, we show that the second variation is equal (up to horizontal differentials) to the vertical differential of the Euler-Lagrange morphism which turns out to be self-adjoint along solutions of the Euler-Lagrange equations. These two objects, respectively, generalize in an invariant way the Hessian morphism and the Jacobi morphism (which is then self-adjoint along critical sections) of a given Lagrangian to the case of higher order Lagrangians. Some examples of classical Lagrangians are provided to illustrate our method.

Drilling at Soultz-sous-Forêts, France, conducted as part of the European 'Hot Dry Rock' Project, penetrated the Rhine Graben basement down to 5 090 m and revealed a porphyritic monzogranite. Chemical composition and REE patterns of three samples at 5 km depth indicate homogeneous composition with a slight vertical differentiation, suggesting stable P -T conditions after the magma emplacement. U/Pb ion-probe zircon dating provides an emplacement age at 331 ± 9 Ma. This age is in agreement with those of the other intrusive granitoids in this part of the Variscan segment, indicating a period of intensive magmatic activity around 330 Ma.  2001 Académie des sciences / Éditions scientifiques et médicales Elsevier SAS

We examine a vertically differentiated duopoly where firms invest in process and product innovation and then compete in prices under full market coverage. We show that (i) process and product innovation are complements (substitutes) for the low-quality (high-quality) firm; (ii) the firm which is initially more efficient invests more than the rival in process innovation; (iii) if the initial differential between marginal costs is sufficiently high, the demand for the less efficient firm is nil and the duopoly equilibrium does not exist.

This study examines the determinants of Turkish outward FDI employing a gravity model. The model estimates the impact of traditional gravity variables, as well as openness, labour productivity, infrastructure, institutions and economic stability on FDI outflows from Turkey to 11 countries, which account for approximately 90% of Turkish outward FDI stock, over the period 1999-2005 years using panel data random effects technique. The results reveal that Turkish FDI has a market-seeking pattern with foreign markets being substituted for domestic market by Turkish firms. On the other hand, economic instability in Turkey emerges as a major deterrent of FDI outflows. Additionally, our results suggest the possibility of FDI in vertically differentiated products in host countries by Turkish investors as well as the importance of push factors.

We examined linkages between technology and structure at the group level of analysis as predictors of group performance. The general hypothesis is that group technology/structural fit is a better predictor of work group performance than either technology or structure alone. Related hypotheses match three technology variables (task predictability, problem analyzability, and interdependence) with three group structural variables (horizontal differentiation, vertical differentiation, and connectedness) to predict group performance. Technology/structural fit variables in this study are significant predictors of group performance, as are group structural properties alone. Technology variables are very poor predictors alone. The fit variables add significant explained variance over and above the technology and structural variables as universalistic predictors. Predictions about which technology and structural variables to match for higher group performance are generally supported. These results could allow future contingency research to make greater contributions to theory building about group performance. Several recent studies have examined the fit between technology and structure as a predictor of work group performance

Bivalve assemblages on coral carpets in the Northern Bay of Safaga do not form distinct associations, but gradually shift in faunal composition. The taxonomic shift is accompanied by continuous variations in bivalve density and percentage of living individuals as well as by a change of coral associations and potential bivalve habitats. The gradual lateral change of associations is best documented by Tridacna maxima and jewel box clams (Chamoidea) and is probably due to variations of the suspension load in the water column. High suspension loads in the water column are additionally indicated by'giant oysters' (extremely large individuals of Hvotissa hyotis) and striking agglomerates of Lopha cristagalli. The vertical differentiation is best documented by the decrease of the zooxanthellate Tridacna maxima and is probably due to the depth-dependent light penetration m the water column, which is attenuated in areas of high suspension load.

The three-dimensional (3D) Rossby wave energy dispersion of a tropical cyclone (TC) is studied using a baroclinic primitive equation model. The model is initialized with a symmetric vortex on a beta plane in an environment at rest. The vortex intensifies while becoming asymmetric and moving northwestward because of the beta effect. A synoptic-scale wave train forms in its wake a few days later. The energy-dispersioninduced Rossby wave train has a noticeable baroclinic structure with alternating cyclonic-anticycloniccyclonic (anticyclonic-cyclonic-anticyclonic) circulations in the lower (upper) troposphere.

We consider a model of vertical competition where downstream firms (retailers) purchase an upstream input from a monopolist and are able to differentiate from each other in terms of quality. Our primary focus is to study the effects of introducing a large retailer, such as a Wal-Mart Supercenter, that is able to lower wholesale prices (i.e. buyer market power). We obtain two main results. First, the store with no buyer market power responds to the presence of the large retailer by increasing its quality, a finding that is consistent with recent efforts by traditional retailers to enhance shoppers' buying experience (i.e. quality). Second, the presence of a large retailer causes consumer welfare to increase. There are, however, two reasons for the increase in consumer welfare: consumers gain from the large retailer's low price (because the upstream discount is partially passed on to the retail price) as well as from the high quality level offered by the traditional retailer. Contrary to the conventional wisdom most of the consumer welfare gains seem due to the latter. The intuition for this result is that price competition softens substantially as a result of firms' quality differentiation. We also investigate the effects of buyer market power on retail and wholesale prices as well as on producer welfare.

W hen selling a product line, a firm has to consider the costs of communicating about the different products to the consumers. This may affect the product line design in general, and which products or services are offered in particular. The problem is that firms have to communicate to consumers, possibly through advertising, to make them consider buying the products that firms are selling. This results in the firm offering a smaller number of products than is optimal when advertising has no costs. This effect is greater the extent of consumer confusion about the advertising messages, and is reduced by a greater ability to target advertising. When offering vertically differentiated products (second-degree price discrimination), under general conditions it is optimal to advertise so that one has a greater proportion of sales of a lower-quality product than if advertising had no cost. This situation also allows the firm to charge a lower price for the high-quality product and offer a higher quality of the low-quality product than it would if advertising were without cost.

This paper offers theoretical foundations to price-and-quality cap regulation of recently liberalized utilities in which vertically differentiated services are provided by a regulated incumbent and an unregulated entrant competing in price and quality. The model may equally well represent competition across asymmetrically regulated industries. We establish that, in a variety of strategic settings, optimal weights in the cap targeted to the incumbent depend also on the market served by the entrant, despite the latter is not directly concerned by regulation. This calls for the possibility that regulators use information about the whole industries, rather than on the sole incumbents. We also evidence that the proposed regulatory scheme is robust to small errors in the estimation of the social value of quality. The paper was completed while the second author was visiting the University of Montréal, whose hospitality is gratefully acknowledged. We are indebted with Carlo Fiorio, David Martimort, Jérôme Pouyet, Bertrand Villeneuve, Ingo Vogelsang, an Associate Editor and two anonymous referees for helpful suggestions. We further acknowledge useful comments from participants at the XVIII SIEP Meeting (Pavia), the 5th Infraday (Berlin), the 4th Conference on Railroad Industry Structure, Competition and Investment (Madrid), the 47th SIE Meeting (Verona) and the 22nd EEA Meeting (Budapest) as well as from seminar participants at the University of Florence. All remaining errors are our own. 1 Service reliability introduces an element of heterogeneity even in electricity, a product that is otherwise perfectly homogeneous. Specifically, in power sectors, reaction lags and supply interruptions are relevant quality dimensions (compare Crampes and Moreaux ).

SUMMARY In this project, a method to extract tectonic activity - induced vertical displacements from InSAR along one-dimensional features (roads, pipelines, aqueducts), is presented and the reliability of this method is evaluated. The evaluation is performed by a comparison of In- SAR results and terrestrial surveying. The test field is in the north - west region of Attiki prefecture, 20km from the center of Athens and the one - dimensional feature is the Mornos aqueduct. The displacements - at least the greatest part - are due to the 07/09/1999 Athens earthquake. The way to make InSAR and terrestrial surveying data compatible and therefore directly comparable includes the well-known InSAR processing actions of interferogram filtering for partial noise removal and phase unwrapping to resolve the mod2 ambiguity. It also includes geodetic reference system transformations - necessary in the cases when the interferogram is in other reference system than the one used in terrestrial measu...