Effects of high-speed rail on intercity travels, utility and social welfare in urban agglomerations: A game-theoretic perspective

Abstract

This paper investigates the effects of newly built high-speed rail on urban performances in terms of intercity travels, utility and social welfare by extending the two-city system into a representative urban agglomeration system consisting of a hub city and two peripheral cities. A framework based on the Cournot model with three interacted games is developed to characterize competitions among HSR operators in the system. Introducing HSR between peripheral cities decentralizes the intercity travel demands from the hub city to peripheral cities, and it does not always induce more that for the urban agglomeration. We find that “weight” on social welfare, substitutability, gross benefits ratio, HSR accessibility and frequency would differentially impact the hub and peripheral cities. Numerical examples and a case study incorporating all factors based on Central Plains Urban Agglomeration in China are conducted to illustrate the model, together with some policy implications.