Technology transition in the national air transportation system : market failure and game theoretic analysis with application to ADS-B

Abstract

This research analyzes the problem of technology transition in the national air transportation system, focusing on the implementation of Automatic Dependent Surveillance-Broadcast (ADS-B). ADS-B is a key technology in the Federal Aviation Administration's plan to modernize the national civil air transportation surveillance system. Data regarding airline perception of benefits, barriers, and knowledge of ADS-B is presented. Market mechanisms that could potentially cause technology implementation failure are identified through game theoretic analysis of airline interview data. Potential market failures identified include public goods failures, cost-benefit asymmetries, information asymmetries, and risk dominance. Potential institutional failures identified include organizational process failures and bureaucratic interests and politics. Government action to correct market failures is explored. Government mechanisms to correct market failures include technology value, support infrastructure development, positive incentives, putative measures, and mandates.