There is a worldwide trend towards private provision of infrastructure and deregulation of transportation services. One important issue in the development of such a privatised transportation system is to understand the interactions and competitive equilibria between the highway and service operators and the resulting level of services to the travellers. In this thesis, we study some of the situations that have arisen from the ongoing structural and technological changes in the transport industry which have not yet been explored. With the application of a game theoretical approach, strategic models are developed to determine any market equilibria as a result of the interactions between the operators in the new competitive market environment, taking into consideration users' travel behavi...[ Read more ]

There is a worldwide trend towards private provision of infrastructure and deregulation of transportation services. One important issue in the development of such a privatised transportation system is to understand the interactions and competitive equilibria between the highway and service operators and the resulting level of services to the travellers. In this thesis, we study some of the situations that have arisen from the ongoing structural and technological changes in the transport industry which have not yet been explored. With the application of a game theoretical approach, strategic models are developed to determine any market equilibria as a result of the interactions between the operators in the new competitive market environment, taking into consideration users' travel behaviour as well as the profit maximisation objectives of the operators. The application of the models developed can help potential private investors and service providers identify how, and under what circumstances, the provision of a highway project or transportation service is feasible and profitable. The most important of all, the models can also help the planners and the public sector assess the impact on welfare in terms of the benefits as well as disbenefits to the private investor, the service provider, users and the society.

Firstly, we study the combined access and usage pricing problem on a private highway. A model is developed to model the travel behaviour and demand equilibrium of users on a private highway under different pricing schemes - usage-only, access-only and combined usage and access pricing, taking into consideration the congestion effect on the highway. The impact of introducing access pricing scheme to replace or as a complement to conventional usage-based pricing is assessed for different market situations. The market situation is characterised by users' willingness to travel and the population size. A hypothetical case is constructed to test the model. Sensitivity analyses are carried out to analyse the impact of different pricing strategies on profits and welfare under different market situations. The numerical results indicate that the access-only scheme is a win-win strategy when the level of congestion is low, i.e. the population size is small and/or users have less desire to travel. On the contrary, the usage-only scheme is a win-win strategy when the level of congestion is high, i.e. the population size is large and users are more willing to pay.

Secondly, we investigate the strategic interactions between a private highway operator and a private transit operator who uses the same highway for its services. Heterogeneity of travellers is taken into account by considering a continuous distribution of values of time. Demand elasticity arises from the inclusion of an outside virtual mode. Game theory is applied to model the possible moves taken by the operators in their interactions. Four games are formulated, representing different decision making processes, including Nash and Stackelberg (leader-follower) games. The different timings of long-run and short-run decisions are also modeled in a two-stage game. Our results indicate that the market equilibria in the four games formulated are quite different as a result of the different sequences of moves. The highway operator is considered to be in a better position in terms of profit making in most cases, while for the transit operator it will generally be more advantageous to be the follower rather than in the leader position.

Thirdly, the competition between buses in a deregulated market is investigated. A game theoretical approach is applied to model the strategic interactions between the operators in the bus market. The conditions for market entry and predatory behaviour are determined. The impact of deregulation of the bus market is then assessed in terms of profits and social cost to the society. A hypothetical case is constructed to test the model. Numerical results indicate that deterrence behaviour of the incumbent is generally the dominant strategy. Accommodation occurs when sunk cost is low and demand relatively high. On the contrary, blockaded entry occurs when sunk cost is high and route density is low. As deterrence behaviour leads to a lower fare and a higher service frequency, the modal share of public transport increases which consequently brings benefits to the society.

Finally, the optimal location and pricing of a Park-and-Ride facility in a linear monocentric city is investigated. Residences are uniformly distributed from the center to the exogenous city boundary, and all trips are from home to the center. A congestible highway and a congestion-free railway can be accessed at all points along the travel corridor. Deterministic and Logit-based mode choice equilibria are characterized for before and after a Park-and-Ride service is introduced. Profit-maximizing and social-cost minimizing Park-and-Ride locations and parking charges are then derived and compared. A numerical example illustrates the possibility of a 'win-win' situation whereby a Park-and-Ride facility can be profitable, as well as socially beneficial by reducing total travel costs.