Oligopoly Models in the Bus Service Industry (in Thai)
Assist. Prof. Saree Worawisutsarakul, Ph.D.
This paper analyzes competition among transport firms in the Bangkok-Khon Kaen bus service industry. The firms provide differentiated services and compete for customers. The analysis uses Cournot and Stackelberg models. Based on the estimation results of the firmsí demand functions, the case of duopoly situation was assumed. The results show that in the equilibrium levels of both models the number of customers, prices, and profits of Nakhonchai Air were higher than those of Khon Kaen Tour. Nakhonchai Air as the Stackelberg leader can increase its profit while Khon Kaen Tour as the follower has a dramatic decrease in its profit. An increase in the level of product differentiation would enhance transport firmsí competitive capacities. This strategy will also reduce the competitive disadvantage of the follower.
Keywords: bus service industry, Cournot competition, Stackelberg competition, oligopoly
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