Impacts of high-speed rail on airlines, airports and regional economies: A survey of recent research

This paper studies competition between air transport and high-speed rail (HSR). While airlines are assumed to maximize profit, HSR may maximize a weighted sum of profit and social welfare. The authors show that both airfare and HSR fare fall as the weight on welfare increases, while airfare decreases, and rail fare increases, in the airport access time. Furthermore, airfare decreases in the rail speed if the marginal cost of HSR with respect to the rail speed is not too large. On the other hand, whether rail fare increases in the rail speed depends on the marginal cost of HSR with respect to the rail speed as well as on the welfare weight. The authors further compare prices, profits and welfare between “with price discrimination” in which airlines price discriminate business from leisure passengers and “without price discrimination”. Welfare in the HSR system can be either higher or lower with price discrimination: In particular, the welfare is higher under price discrimination when the travel benefit difference is sufficiently larger than the time value difference between business and leisure passengers.

Effects of High-Speed Rail and Air Transport Competition on Prices, Profits and Welfare

Supplier Encroachment, Information Sharing and Channel Structure in Online Retail Platforms

This paper investigates the effect of a platform’s private-brand introduction on a manufacturer that sells products through that platform by considering the investment effect and selling mode. We first analyze the role of the private brand and the investment effect on the manufacturer under the reselling mode and the agency mode, respectively. We then examine how the private brand introduction and the investment effect impact the manufacturer’s optimal selling mode choice. The introduction of a private brand is believed to threaten manufacturers that sell goods through the platform. However, we find that, in the reselling mode, a manufacturer can benefit from private-brand introduction through the increased demand and wholesale price generated by the platform’s increased marketing investment, as long as the competition intensity remains relatively low. In the agency mode, the manufacturer benefits more with a higher proportional fee after private-brand introduction. Further, the investment effect can act as a buffer, making the manufacturer more robust when facing threats. Also, after private-brand introduction, the manufacturer prefers the agency mode, but when it comes to investment and high investment efficiency, it is wiser for the manufacturer to keep reselling when facing private-brand introduction.

Private-brand introduction and investment effect on online platform-based supply chains

This article studies a competitive freight transportation pricing problem in the presence of two Intermodal Service Providers (ISPs) and a Direct Transportation System (DTS). The ISPs apply both rail and road transportation modes to carry the demands of a network of customers. The DTS uses only roads to carry the demands, without any transhipment at a distribution center. Each customer chooses its best transportation service based on the prices offered by the ISPs and the expenses of using the DTS. The ISPs determine their prices to maximize their profits, considering the customers’ choice behaviour. In order to determine the equilibrium decisions, a non-cooperative game-theoretic approach based on Stackelberg leader-follower competition is applied. Mixed-integer linear programming models are proposed to formulate this competition. A real-life case study is also conducted to demonstrate the validity of the models. We find that a barrier pricing strategy from the leader to deter the entrance of the follower ISP is not recommended for both of them because it may even lead to a negative value of profits for the leader. Finally, some sustainability objectives of the government, as the strategic decision maker, are examined. The results could help the government assess the effects of its policies on the transportation market, the environment, and the society.

A Game-Theoretic Approach to the Freight Transportation Pricing Problem in the Presence of Intermodal Service Providers in a Competitive Market

We examine a model in which a supplier sells products through an online platform and an offline retailer under conditions of demand uncertainty. The actual demand potential can be observed (or predicted accurately using rich sales data) by the platform and retailer, but not by the supplier. The model addresses the following issues. First, the supplier optimizes its multi‐channel strategy, including a selling format choice in the online channel and optimal pricing. Specifically, although a traditional wholesale model is used offline, both wholesale and agency models are prepared online. Given a commission rate set by the platform for the agency model, the supplier chooses one selling format from the two models. The second one is related to the platform's information‐sharing policy. The platform can commit to sharing its demand information with the supplier. This study elucidates how the platform's information sharing alters the supplier's multi‐channel management and subsequently affects the retailer eventually. Results show that the platform charges its commission rate so that the supplier chooses the agency model, unless the consumer demand is sufficiently uncertain. We also demonstrate that the platform's information sharing capability makes the agency model more likely to be adopted. However, information transparency arising from the platform's voluntary information disclosure can be unfavorable to the retailer. Finally, we demonstrate that, with information sharing, a shift from wholesale to agency models can be desirable not only for the platform and supplier, but also for the retailer (i.e., Pareto‐improving).

Platform Information Transparency and Effects on Third-Party Suppliers and Offline Retailers

This study investigates the desirable transportation policy for a government seeking to regulate the competition between high-speed rail (HSR) and air transportation. To address this issue, we construct a game-theoretic model. A basic assumption underlying the model is that the airline maximizes its own profit whereas the HSR operator maximizes a weighted sum of profit and social welfare due to the government regulation. We assume a two-stage game in which the government sets the weight to maximize social welfare in the first stage and the HSR operator and the airline maximize their respective objective functions in the second stage. The central result from our model is that partial public regulation arises as a subgame perfect equilibrium unless the benefits to consumers from using the HSR are sufficiently large or sufficiently small compared to the benefits to consumers from using air transportation. The result provides a theoretical foundation for the public policies of joint investments by both governments and HSR operators in HSR networks in European and Asian countries. In addition, our results suggest that the optimal regulation by the government depends on the benefits for consumers using each mode of transport and the difference between the levels of benefits.

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Yushi Tsunoda

Papers

Platform Information Transparency and Effects on Third-Party Suppliers and Offline Retailers

Transportation policy for high-speed rail competing with airlines

Effectiveness of exclusive territories by competing manufacturers managing dual-channel supply chains

When should a firm set its selling price to cope with gray market trade

Airport concession revenue sharing and entry deterrence