Price competition between intercity railway and bus

Ticket price is the key factor in the competition between intercity railway and bus. The relationship between intercity transit demand is set up according to the ticket prices. Logit model is used to establish the mode split in intercity transit system. Then the profit functions of both companies are presented. Based on the profit functions, a price game model is prop0sed to discuss the competition between intercity railway and bus. The existence and computing method of the Nash equilibrium price solutions are proposed. The conclusions of this research are useful to managers for their operations with intercity public transit system.