Analysis of high-speed rail and airline transport cooperation in presence of non-purchase option
Abstract We study cooperation between the airline and high-speed rail (HSR) sectors by formulating their joint profit as a maximization problem using a multinomial logit choice model in a three-node setting. We allow the non-purchase option as an outside option available to consumers. The demand for...
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| Format: | Article |
| Language: | English |
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SpringerOpen
2018-09-01
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| Series: | Journal of Modern Transportation |
| Subjects: | |
| Online Access: | http://link.springer.com/article/10.1007/s40534-018-0172-z |
| _version_ | 1818645452066652160 |
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| author | Kimitoshi Sato Yihsu Chen |
| author_facet | Kimitoshi Sato Yihsu Chen |
| author_sort | Kimitoshi Sato |
| collection | DOAJ |
| description | Abstract We study cooperation between the airline and high-speed rail (HSR) sectors by formulating their joint profit as a maximization problem using a multinomial logit choice model in a three-node setting. We allow the non-purchase option as an outside option available to consumers. The demand for each choice is not only a function of the price but also the service quality, such as the total trip time, frequency of service, and ease of connecting from the hub to a nearby HSR station. As a result, the following findings are presented. First, regardless of the service quality of either sector and the non-purchase option, cooperation decreases the total volume of the domestic market of a country. Second, when the attractiveness of the outside option is high, the HSR and air sectors can prevent a large reduction in the total volume by cooperation in the connecting market. However, this is not the case in the domestic market. Third, if the non-purchase quality in the domestic market is high, then cooperation increases the social welfare of the whole market. If the non-purchase quality is low, then cooperation increases the welfare of the whole market only in cases where the number of potential customers in the connecting market is relatively large. We also show the effect of improving air–rail service quality on each market share and on the total profit. |
| first_indexed | 2024-12-17T00:30:58Z |
| format | Article |
| id | doaj.art-9b4552246e884aed9c443efd1e9023a2 |
| institution | Directory Open Access Journal |
| issn | 2095-087X 2196-0577 |
| language | English |
| last_indexed | 2024-12-17T00:30:58Z |
| publishDate | 2018-09-01 |
| publisher | SpringerOpen |
| record_format | Article |
| series | Journal of Modern Transportation |
| spelling | doaj.art-9b4552246e884aed9c443efd1e9023a22022-12-21T22:10:18ZengSpringerOpenJournal of Modern Transportation2095-087X2196-05772018-09-0126423125410.1007/s40534-018-0172-zAnalysis of high-speed rail and airline transport cooperation in presence of non-purchase optionKimitoshi Sato0Yihsu Chen1Faculty of Engineering, Kanagawa UniversityDepartment of Technology Management, University of California, Santa CruzAbstract We study cooperation between the airline and high-speed rail (HSR) sectors by formulating their joint profit as a maximization problem using a multinomial logit choice model in a three-node setting. We allow the non-purchase option as an outside option available to consumers. The demand for each choice is not only a function of the price but also the service quality, such as the total trip time, frequency of service, and ease of connecting from the hub to a nearby HSR station. As a result, the following findings are presented. First, regardless of the service quality of either sector and the non-purchase option, cooperation decreases the total volume of the domestic market of a country. Second, when the attractiveness of the outside option is high, the HSR and air sectors can prevent a large reduction in the total volume by cooperation in the connecting market. However, this is not the case in the domestic market. Third, if the non-purchase quality in the domestic market is high, then cooperation increases the social welfare of the whole market. If the non-purchase quality is low, then cooperation increases the welfare of the whole market only in cases where the number of potential customers in the connecting market is relatively large. We also show the effect of improving air–rail service quality on each market share and on the total profit.http://link.springer.com/article/10.1007/s40534-018-0172-zIntegrationCompetitionAirlineHigh-speed railMultinomial logit model |
| spellingShingle | Kimitoshi Sato Yihsu Chen Analysis of high-speed rail and airline transport cooperation in presence of non-purchase option Journal of Modern Transportation Integration Competition Airline High-speed rail Multinomial logit model |
| title | Analysis of high-speed rail and airline transport cooperation in presence of non-purchase option |
| title_full | Analysis of high-speed rail and airline transport cooperation in presence of non-purchase option |
| title_fullStr | Analysis of high-speed rail and airline transport cooperation in presence of non-purchase option |
| title_full_unstemmed | Analysis of high-speed rail and airline transport cooperation in presence of non-purchase option |
| title_short | Analysis of high-speed rail and airline transport cooperation in presence of non-purchase option |
| title_sort | analysis of high speed rail and airline transport cooperation in presence of non purchase option |
| topic | Integration Competition Airline High-speed rail Multinomial logit model |
| url | http://link.springer.com/article/10.1007/s40534-018-0172-z |
| work_keys_str_mv | AT kimitoshisato analysisofhighspeedrailandairlinetransportcooperationinpresenceofnonpurchaseoption AT yihsuchen analysisofhighspeedrailandairlinetransportcooperationinpresenceofnonpurchaseoption |