Competition on the Fehmarn Belt

The Fehmarn Belt is a strait between Denmark and Germany, currently served by a ferry.

This note presents a model to analyse competition between the ferry and a planned tunnel, scheduled for 2022. The model is designed to be calibrated with real-world data and to address the following questions: 1. Will the tunnel make the ferry exit the market once it operates? 2. Will the tunnel’s toll revenues suce to cover its cost?

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