Serial and parallel duopoly competition in multi-segment transportation routes
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AbstractWe consider duopoly competition among transportation firms operating on a multi-segment route, and analyze the welfare consequences of different market structures in serial and parallel transport network structures. Travellers are concerned with both price and latency, and may opt to avoid travel in the system altogether if conditions are insufficiently attractive. Firms simultaneously set prices to maximize their own profits. We derive the traffic flow consequences of duopoly, monopoly, price-free, and socially optimal scenarios for both the serial and parallel structures, drawing comparisons regarding traffic flows, prices, and welfare. In extensions of the model, we consider firms’ operating costs, more than two firms, and hybrid market structures. The results point to a higher overall social welfare desirability of parallel competition along multi-segment transportation routes. Our study delivers important policy implications regarding the optimal route structure design.
Acceptance Date08/12/2019
All Author(s) ListZhonghong Kuang, Zeng Lian, Jaimie W. Lien, Jie Zheng
Journal nameTransportation Research Part E: Logistics and Transportation Review
Volume Number133
Article number101821
LanguagesEnglish-United States
KeywordsDuopoly competition, Multi-segment journey, Transportation routes, Serial structure, Parallel structure

Last updated on 2020-31-03 at 00:29