The following section will outline the methodology and assumptions. In section 3, we examine the fare-setting behaviour of public transport operators in a static model with fixed demand, and briefly discuss why the monopolistic and serial Nash-Bertrand equilibrium fares are equal in that setting; this gives us a benchmark against which to compare the results of a dynamic model. In section 4, we then formulate this dynamic model, derive a reduced form of the public transport operator’s profit optimization problem and again compare monopolistic and serial Nash-Bertrand fares. Section 5 illustrates these issues
with a numerical version of the dynamic model, and examines which parameters influence the difference between the monopolistic and duopolistic fares, and thus social welfare. Section 6 concludes.