IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v15y2023i9p7712-d1142006.html
   My bibliography  Save this article

Competition between Green and Non-Green Travel Companies: The Role of Governmental Subsidies in Green Travel

Author

Listed:
  • Jun Tu

    (College of Science, Liaoning Technical University, Fuxin 123000, China)

  • Juan Du

    (College of Science, Liaoning Technical University, Fuxin 123000, China)

  • Min Huang

    (College of Information Science and Engineering, Northeastern University, Shenyang 110819, China)

Abstract

The problem of carbon emissions in transportation is an increasing concern, and consumers need to be encouraged towards green modes of travel to achieve low-carbon travel. To compete with non-green travel companies, green travel companies have considered implementing expensive green efforts to attract consumers. Decisions on travel prices, the green efforts of green travel companies to maintain their competitiveness, and the role of governmental subsidies in promoting green travel must be thoroughly investigated. To consider travel competitiveness and the role of governmental subsidies that support the increased expenses of green travel, this study defined four different decision-making scenarios. The Nash game model without governmental subsidies and the Stackelberg–Nash game model with governmental subsidies were built and solved to understand the effects on the pricing and green efforts of travel companies. The equilibrium results and the role of governmental subsidies were analyzed theoretically and numerically. The results showed that governmental subsidies could boost green efforts while increasing green and non-green travel prices. The competition between green and non-green travel companies both undermined the role of the governmental subsidies and reduced the green and non-green travel prices. A sufficiently large cost-sharing coefficient from the government caused the green travel demand to be higher than the non-green travel demand.

Suggested Citation

  • Jun Tu & Juan Du & Min Huang, 2023. "Competition between Green and Non-Green Travel Companies: The Role of Governmental Subsidies in Green Travel," Sustainability, MDPI, vol. 15(9), pages 1-33, May.
    • Handle: RePEc:gam:jsusta:v:15:y:2023:i:9:p:7712-:d:1142006
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/15/9/7712/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/15/9/7712/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Miao, Rui & Guo, Peng & Huang, Wenjie & Li, Qi & Zhang, Bo, 2022. "Profit model for electric vehicle rental service: Sensitive analysis and differential pricing strategy," Energy, Elsevier, vol. 249(C).
    2. Zhu, Wenge & He, Yuanjie, 2017. "Green product design in supply chains under competition," European Journal of Operational Research, Elsevier, vol. 258(1), pages 165-180.
    3. Zakharenko, Roman, 2023. "Pricing shared vehicles," Economics of Transportation, Elsevier, vol. 33(C).
    4. Zhou, Yaqian & Yang, Hai & Ke, Jintao & Wang, Hai & Li, Xinwei, 2022. "Competition and third-party platform-integration in ride-sourcing markets," Transportation Research Part B: Methodological, Elsevier, vol. 159(C), pages 76-103.
    5. Zhang, J. & Meng, M. & Wang, David, Z.W., 2019. "A dynamic pricing scheme with negative prices in dockless bike sharing systems," Transportation Research Part B: Methodological, Elsevier, vol. 127(C), pages 201-224.
    6. Ke, Jintao & Yang, Hai & Li, Xinwei & Wang, Hai & Ye, Jieping, 2020. "Pricing and equilibrium in on-demand ride-pooling markets," Transportation Research Part B: Methodological, Elsevier, vol. 139(C), pages 411-431.
    7. Mo, Dong & Yu, Jingru & Chen, Xiqun Michael, 2020. "Modeling and managing heterogeneous ride-sourcing platforms with government subsidies on electric vehicles," Transportation Research Part B: Methodological, Elsevier, vol. 139(C), pages 447-472.
    8. Zhang, Kenan & Nie, Yu (Marco), 2021. "To pool or not to pool: Equilibrium, pricing and regulation," Transportation Research Part B: Methodological, Elsevier, vol. 151(C), pages 59-90.
    9. Fan, Jing-Li & Wang, Jia-Xing & Zhang, Xian, 2020. "An innovative subsidy model for promoting the sharing of Electric Vehicles in China: A pricing decisions analysis," Energy, Elsevier, vol. 201(C).
    10. Li, Manzi & Jiang, Gege & Lo, Hong K., 2022. "Pricing strategy of ride-sourcing services under travel time variability," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 159(C).
    11. Zhao, Meng & Li, Bin & Ren, Jiali & Hao, Zhihua, 2023. "Competition equilibrium of ride-sourcing platforms and optimal government subsidies considering customers’ green preference under peak carbon dioxide emissions," International Journal of Production Economics, Elsevier, vol. 255(C).
    12. Li, Sen & Yang, Hai & Poolla, Kameshwar & Varaiya, Pravin, 2021. "Spatial pricing in ride-sourcing markets under a congestion charge," Transportation Research Part B: Methodological, Elsevier, vol. 152(C), pages 18-45.
    13. Zuzanna Kłos-Adamkiewicz & Piotr Gutowski, 2022. "The Outbreak of COVID-19 Pandemic in Relation to Sense of Safety and Mobility Changes in Public Transport Using the Example of Warsaw," Sustainability, MDPI, vol. 14(3), pages 1-22, February.
    14. Baichuan Mo & Zhejing Cao & Hongmou Zhang & Yu Shen & Jinhua Zhao, 2020. "Competition between shared autonomous vehicles and public transit: A case study in Singapore," Papers 2001.03197, arXiv.org, revised Feb 2021.
    15. Lin, Xiaogang & Sun, Cuiying & Cao, Bin & Zhou, Yong-Wu & Chen, Chuanying, 2021. "Should ride-sharing platforms cooperate with car-rental companies? Implications for consumer surplus and driver surplus," Omega, Elsevier, vol. 102(C).
    16. Li, Yanan & Li, Xiang & Zhang, Sicheng, 2021. "Optimal pricing of customized bus services and ride-sharing based on a competitive game model," Omega, Elsevier, vol. 103(C).
    17. Zhu, Zheng & Xu, Ailing & He, Qiao-Chu & Yang, Hai, 2021. "Competition between the transportation network company and the government with subsidies to public transit riders," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 152(C).
    18. Emami, Maryam & Haghshenas, Hossein & Talebian, Ahmadreza & Kermanshahi, Shahab, 2022. "A game theoretic approach to study the impact of transportation policies on the competition between transit and private car in the urban context," Transportation Research Part A: Policy and Practice, Elsevier, vol. 163(C), pages 320-337.
    19. Zhang, Kenan & Nie, Yu (Marco), 2021. "Inter-platform competition in a regulated ride-hail market with pooling," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 151(C).
    20. Jiuh-Biing Sheu & Fang Li, 2014. "Market Competition and Greening Transportation of Airlines Under the Emission Trading Scheme: A Case of Duopoly Market," Transportation Science, INFORMS, vol. 48(4), pages 684-694, November.
    21. Rategh, Yalda & Tamannaei, Mohammad & Zarei, Hamid, 2022. "A game-theoretic approach to an oligopolistic transportation market: Coopetition between incumbent systems subject to the entrance threat of an HSR service," Transportation Research Part A: Policy and Practice, Elsevier, vol. 165(C), pages 144-171.
    22. Ranran Yang & Ruyin Long & Yu Bai & Lanlan Li, 2017. "The Influence of Household Heterogeneity Factors on the Green Travel Behavior of Urban Residents in the East China Region," Sustainability, MDPI, vol. 9(2), pages 1-17, February.
    23. Socorro, M. Pilar & Betancor, Ofelia, 2020. "Air transport subsidies for resident passengers: The unexpected effects on competition," Research in Transportation Economics, Elsevier, vol. 79(C).
    24. Chen, Xiqun (Michael) & Zheng, Hongyu & Ke, Jintao & Yang, Hai, 2020. "Dynamic optimization strategies for on-demand ride services platform: Surge pricing, commission rate, and incentives," Transportation Research Part B: Methodological, Elsevier, vol. 138(C), pages 23-45.
    25. Jacob, Jagan & Roet-Green, Ricky, 2021. "Ride solo or pool: Designing price-service menus for a ride-sharing platform," European Journal of Operational Research, Elsevier, vol. 295(3), pages 1008-1024.
    26. Kitthamkesorn, Songyot & Chen, Anthony, 2017. "Alternate weibit-based model for assessing green transport systems with combined mode and route travel choices," Transportation Research Part B: Methodological, Elsevier, vol. 103(C), pages 291-310.
    27. Jiang, Zhoutong & Lei, Chao & Ouyang, Yanfeng, 2020. "Optimal investment and management of shared bikes in a competitive market," Transportation Research Part B: Methodological, Elsevier, vol. 135(C), pages 143-155.
    28. Haider, Zulqarnain & Nikolaev, Alexander & Kang, Jee Eun & Kwon, Changhyun, 2018. "Inventory rebalancing through pricing in public bike sharing systems," European Journal of Operational Research, Elsevier, vol. 270(1), pages 103-117.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zhong, Yuanguang & Lan, Yibo & Chen, Zhi & Yang, Jiazi, 2023. "On-demand ride-hailing platforms with heterogeneous quality-sensitive customers: Dedicated system or pooling system?," Transportation Research Part B: Methodological, Elsevier, vol. 173(C), pages 247-266.
    2. Zhao, Meng & Li, Bin & Ren, Jiali & Hao, Zhihua, 2023. "Competition equilibrium of ride-sourcing platforms and optimal government subsidies considering customers’ green preference under peak carbon dioxide emissions," International Journal of Production Economics, Elsevier, vol. 255(C).
    3. Ke, Jintao & Chen, Xiqun (Michael) & Yang, Hai & Li, Sen, 2022. "Coordinating supply and demand in ride-sourcing markets with pre-assigned pooling service and traffic congestion externality," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 166(C).
    4. Meijian Yang & Enjun Xia, 2021. "A Systematic Literature Review on Pricing Strategies in the Sharing Economy," Sustainability, MDPI, vol. 13(17), pages 1-28, August.
    5. Liu, Yang & Li, Sen, 2023. "An economic analysis of on-demand food delivery platforms: Impacts of regulations and integration with ride-sourcing platforms," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 171(C).
    6. Yining Liu & Yanfeng Ouyang, 2022. "Planning ride-pooling services with detour restrictions for spatially heterogeneous demand: A multi-zone queuing network approach," Papers 2208.02219, arXiv.org, revised Jun 2023.
    7. Liu, Yining & Ouyang, Yanfeng, 2023. "Planning ride-pooling services with detour restrictions for spatially heterogeneous demand: A multi-zone queuing network approach," Transportation Research Part B: Methodological, Elsevier, vol. 174(C).
    8. Li, Manzi & Jiang, Gege & Lo, Hong K., 2023. "Optimal cancellation penalty for competing ride-sourcing platforms under waiting time uncertainty," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 174(C).
    9. Wang, Yao & Jin, Huan & Zheng, Shiyuan & Shang, Wen-Long & Wang, Kun, 2023. "Bike-sharing duopoly competition under government regulation," Applied Energy, Elsevier, vol. 343(C).
    10. Zhu, Zheng & Xu, Ailing & He, Qiao-Chu & Yang, Hai, 2021. "Competition between the transportation network company and the government with subsidies to public transit riders," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 152(C).
    11. Li, Manzi & Jiang, Gege & Lo, Hong K., 2022. "Pricing strategy of ride-sourcing services under travel time variability," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 159(C).
    12. Di Ao & Jing Gao & Zhijie Lai & Sen Li, 2021. "Regulating Transportation Network Companies with a Mixture of Autonomous Vehicles and For-Hire Human Drivers," Papers 2112.07218, arXiv.org, revised Dec 2023.
    13. Shetty, Akhil & Li, Sen & Tavafoghi, Hamidreza & Qin, Junjie & Poolla, Kameshwar & Varaiya, Pravin, 2022. "An analysis of labor regulations for transportation network companies," Economics of Transportation, Elsevier, vol. 32(C).
    14. Bahrami, Sina & Nourinejad, Mehdi & Nesheli, Mahmood Mahmoodi & Yin, Yafeng, 2022. "Optimal composition of solo and pool services for on-demand ride-hailing," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 161(C).
    15. Chen, Mingyang & Zhao, Daozhi & Gong, Yeming & Rekik, Yacine, 2022. "An on-demand service platform with self-scheduling capacity: Uniform versus multiplier-based pricing," International Journal of Production Economics, Elsevier, vol. 243(C).
    16. Gu, Wei & Yu, Xiaoru & Zhang, Shichen & Yan, Xiangbin & Wang, Chen, 2023. "To outsource or not: Bike-share rebalancing strategies under the service quality deviation of a third party," European Journal of Operational Research, Elsevier, vol. 310(2), pages 847-859.
    17. Dong, Zhongpeng & Fan, Zhi-Ping & Wang, Ningning, 2023. "An analysis of pricing strategy for bike-sharing services: The role of the inconvenience cost," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 175(C).
    18. Zhang, Kenan & Nie, Yu (Marco), 2022. "Mitigating traffic congestion induced by transportation network companies: A policy analysis," Transportation Research Part A: Policy and Practice, Elsevier, vol. 159(C), pages 96-118.
    19. Vignon, Daniel & Yin, Yafeng & Ke, Jintao, 2023. "Regulating the ride-hailing market in the age of uberization," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 169(C).
    20. Cai, Zeen & Mo, Dong & Geng, Maosi & Tang, Wei & Chen, Xiqun Michael, 2023. "Integrating ride-sourcing with electric vehicle charging under mixed fleets and differentiated services," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 169(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:15:y:2023:i:9:p:7712-:d:1142006. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.