Analysis of high-speed rail and airline transport cooperationin presence of non-purchase option

摘要

We study cooperation between the airline andhigh-speed rail （HSR） sectors by formulating their jointprofit as a maximization problem using a multinomial logitchoice model in a three-node setting. We allow the nonpurchaseoption as an outside option available to consumers.The demand for each choice is not only a functionof the price but also the service quality, such as the totaltrip time, frequency of service, and ease of connecting fromthe hub to a nearby HSR station. As a result, the followingfindings are presented. First, regardless of the servicequality of either sector and the non-purchase option,cooperation decreases the total volume of the domesticmarket of a country. Second, when the attractiveness of theoutside option is high, the HSR and air sectors can preventa large reduction in the total volume by cooperation in theconnecting market. However, this is not the case in thedomestic market. Third, if the non-purchase quality in thedomestic market is high, then cooperation increases thesocial welfare of the whole market. If the non-purchasequality is low, then cooperation increases the welfare of thewhole market only in cases where the number of potentialcustomers in the connecting market is relatively large. Wealso show the effect of improving air-rail service qualityon each market share and on the total profit.