WSEAS Transactions on Business and Economics
Print ISSN: 1109-9526, E-ISSN: 2224-2899
Volume 16, 2019
Transportation Subsidy Models Involving Operator and Manufacturer: A Case Study in Indonesia
Authors: H. Husniah, Y. T. Bayuzetra, G. Gunawan, A. K. Supriatna, U. S. Pasaribu
Abstract: In order to reduce a high amount of traffic congestion in a city, a government adopted fiscal subsidy to encourage the use of public transportation, especially buses. This paper deals with two government’s subsidy models: a subsidy for purchasing buses from the manufacturers and a subsidy for reducing ticket price for passengers. From both subsidy models, we determine the maximum profit of the operator and manufacturer using non-cooperative solution game theory. By Analyzing both models and making numerical examples using data from Indonesia public transport, it is expected that the influence of subsidy to the profit of the operator and manufacturers can be revealed. The result indicates that reducing ticket price will give higher profit both to the operator and manufacturers.
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Keywords: Subsidy model, transportation operator, non-cooperative solution
Pages: 60-67
WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / 2224-2899, Volume 16, 2019, Art. #8