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Differential Pricing Strategies of High Speed Railway Based on Prospect Theory: An Empirical Study from China
Open AccessArticle

Time-Dependent Pricing for High-Speed Railway in China Based on Revenue Management

1
School of Traffic and Transportation Engineering, Central South University, Changsha 410075, China
2
Department of Civil Engineering, SUNY Polytechnic Institute, Utica, NY 13502, USA
3
School of Mathematical Sciences, City University of Hong Kong, Hong Kong 999077, China
*
Author to whom correspondence should be addressed.
Sustainability 2019, 11(16), 4272; https://doi.org/10.3390/su11164272
Received: 22 May 2019 / Revised: 21 July 2019 / Accepted: 5 August 2019 / Published: 7 August 2019
(This article belongs to the Special Issue Sustainability Issues in Transport Pricing)
High-speed railway (HSR) is recognized as a green transportation mode with lower energy consumption and less pollution emission than other transportation. At present, China has the largest HSR network globally, but the maximum revenue of railway transportation corporations has not been realized. In order to make HSR achieve a favorable position within the fierce competition in the market, increase corporate revenue, and achieve the sustainable development of HSR and railway corporations, we introduce the concept of revenue management in HSR operations and propose an innovative model to optimize the price and seat allocation for HSR simultaneously. In the study, we formulate the optimization problem as a mixed-integer nonlinear programming (MINLP) model, which appropriately captures passengers’ choice behavior. To reduce the computational complexity, we further transform the proposed MINLP model into an equivalent model. Finally, the effectiveness of both the proposed model and solution algorithm are tested and validated by numerical experiments. The research results show that the model can flexibly adjust the price and seat allocation of the corresponding ticketing period according to the passenger demand, and increase the total expected revenue by 5.92% without increasing the capacity. View Full-Text
Keywords: HSR; railway pricing; railway revenue management; elastic demand; sustainable development of HSR HSR; railway pricing; railway revenue management; elastic demand; sustainable development of HSR
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Qin, J.; Zeng, Y.; Yang, X.; He, Y.; Wu, X.; Qu, W. Time-Dependent Pricing for High-Speed Railway in China Based on Revenue Management. Sustainability 2019, 11, 4272.

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