A Non-cooperative Game Theory Approach to Analyse the Competition Between HSR and Air

Guglielmo Iulio, Taheseen Bashir and Francesca Pagliara ()
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Guglielmo Iulio: University of Naples Federico II
Taheseen Bashir: University of Naples Federico II
Francesca Pagliara: University of Naples Federico II

A chapter in Socioeconomic Impacts of High-Speed Rail Systems, 2025, pp 41-57 from Springer

Abstract: Abstract High-speed rail (HSR) is becoming a more and more popular mode alternative choice for passengers. In the literature, many researchers have examined the direct and indirect impacts of HSR, and the competition between HSR and Air. Indeed, several approaches have been proposed to analyse this competition, but the use of game theory brought a new perspective in this research field. In this paper, the case study linked to the construction of a new HSR line with a strategic hub in the city of Bucharest (Romania) has been analysed. The HSR-Air competition issue has been studied with reference to the Bucharest-Budapest corridor and the Bucharest-Sofia corridor. The inclusion of HSR within the market in which Air represents today the only alternative for travelling between these cities could significantly have an impact on the market equilibrium. In this paper, a Game Theoretical Approach was developed to study the competition between HSR and Air in the Eastern European context; and a non-cooperative game was developed involving the two competitors HSR and Air, both aiming to maximise their profits. It is expected that HSR will attract part of the travel demand that previously chose plane between the same cities. Furthermore, the entry into the market of a competitor, such as HSR, would lead to a reduction in the Air fares compared to the previous situation, in which the Air market dominated.

Keywords: High speed rail; Air transport; Non-cooperative game; Nash equilibrium (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:spr:prbchp:978-3-031-82528-6_3

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DOI: 10.1007/978-3-031-82528-6_3

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