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A game-theoretic analysis of competition in a deregulated bus market

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  • Wang, Judith Y.T.
  • Yang, Hai

Abstract

A game theoretical approach is applied to model the strategic interactions between the operators in a deregulated bus market, taking into consideration price competition as well as competition over service frequency. The conditions for market entry and predatory behavior are determined. The impact of deregulation of the bus market is then assessed in terms of profits and social cost to the society. A hypothetical case is constructed to test the model. Numerical results indicate that deterrence is a dominant strategy in most market situations, which leads to lower fare and higher service frequency, and consequently brings benefits to the society.

Suggested Citation

  • Wang, Judith Y.T. & Yang, Hai, 2005. "A game-theoretic analysis of competition in a deregulated bus market," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 41(4), pages 329-355, July.
    • Handle: RePEc:eee:transe:v:41:y:2005:i:4:p:329-355
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    Citations

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    Cited by:

    1. Hua Wang & Xiaoning Zhang, 2017. "Game theoretical transportation network design among multiple regions," Annals of Operations Research, Springer, vol. 249(1), pages 97-117, February.
    2. Zhi-Chun Li & William Lam & S. Wong, 2012. "Optimization of Number of Operators and Allocation of New Lines in an Oligopolistic Transit Market," Networks and Spatial Economics, Springer, vol. 12(1), pages 1-20, March.
    3. Gremm, Cornelia & Bälz, David & Corbo, Chris & Mitusch, Kay, 2019. "Intermodal competition between intercity buses and trains: A theoretical model," Working Paper Series in Economics 135, Karlsruhe Institute of Technology (KIT), Department of Economics and Management.
    4. Philippe Gagnepain & Marc Ivaldi & Catherine Muller-Vibes, 2011. "The Industrial Organization of Competition in Local Bus Services," Chapters, in: André de Palma & Robin Lindsey & Emile Quinet & Roger Vickerman (ed.), A Handbook of Transport Economics, chapter 32, Edward Elgar Publishing.
    5. 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.
    6. Wang, Hua & Meng, Qiang & Zhang, Xiaoning, 2014. "Game-theoretical models for competition analysis in a new emerging liner container shipping market," Transportation Research Part B: Methodological, Elsevier, vol. 70(C), pages 201-227.
    7. Athena Roumboutsos & Alenka Temeljotov-Salaj & Iosif Karousos, 2020. "Indicators for Sustainable Demand Risk Allocation in Transport Infrastructure Projects," Sustainability, MDPI, vol. 12(22), pages 1-23, November.
    8. Varun Raturi & Ashish Verma, 2019. "Competition between High Speed Rail and Conventional Transport Modes: Market Entry Game Analysis on Indian Corridors," Networks and Spatial Economics, Springer, vol. 19(3), pages 763-790, September.

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