Strategic coopetition among transportation service providers considering supply-demand congestion effects and asymmetric bargaining power

Abstract

The phenomenon of transportation service providers (TSPs) engaging in both competition and cooperation, commonly referred to as coopetition, has become increasingly prevalent in the transportation market. This is driven by the rapid advancements in information technology and sharing economy. In practice, competitive TSPs can engage in a resource exchange scheme to share their resources to improve their service quality. However, such a resource exchange scheme may not be sustained since the service prices and profits will be further changed due to the competition in the end market. This study proposes a two-stage sequential-move game to characterize the coopetition problem between TSPs, wherein the first-stage resource exchange problem is modeled with a Nash bargaining game, and the second-stage pricing problem is modeled with a non-cooperative Nash game. Different from prior studies, our model incorporates the supply–demand congestion effects and the asymmetric bargaining power of TSPs. The subsequent impacts on social welfare, TSPs, and end users are investigated. Analytical results show that only when the unit price of the exchanged resources decreases in the exchanged resource quantity will the resource-exchange scheme succeed. Furthermore, we find that TSPs prefer to leave some “buffer zone” in between to avoid fierce competition with price wars.