Competition between High-Speed Rail and Airline Based on Game Theory

The coexistence of high-speed rail (HSR) and airline in a busy transportation corridor generates competition between the two transportation modes. An unfair competition between HSR and airline not only reduces both revenues, but also triggers a series of social problems. Based on generalized costs, this paper proposes combining an improved gray prediction model, modified gravity model, and Logit model to predict the average passenger flow, induced passenger flow, and transfer passenger flow. According to the predicted results, we establish a game model that considers different stages of the HSR development. For demonstrative purposes, the approach is applied to an empirical study in China, that is, the competition between Beijing-Shenyang HSR and airline. Malignant fare war will make both parties lose out. Either mode that improves service quality will generate more revenue. If both parties improve the level of service, all incomes of the HSR, airline, and community increase. Results show the HSR contribution is greater than the airline in the case study.

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