Over-supply in Public Transportation: Case Study of Bus and Metro Lines in Harbin City, China

Abstract

As the two most important modes in public transportation, the coordinated development of bus and metro networks significantly influences the efficiency of public transportation. However, two parallel bus and metro lines belonging to different operators may lead to supply competition and consequently yield over-supply. Taking two parallel bus and metro lines in Harbin city, China as a case study, this paper, drawing on game theory, establishes a utility model based on the two lines’ frequencies, and reveals and explains the fundamental reason for the over-supply problem using a Nash equilibrium. In an attempt to resolve this issue, the study proposes a new operation mode: integrating frequencies of the two modes to obtain larger total profits then reallocating the total profits to the two modes. The case study shows that this new operation mode can effectively solve the over-supply problem while satisfying both operators of the two modes, and hence having practical value.

Keywords

• public transportation
• supply competition
• Nash equilibrium
• over-supply
• game theory
• China