Developing public transportation resilience against the epidemic through government tax policies: A game-theoretic approach

Abstract

Transportation companies have a significant task in creating resilient public transportation during the pandemic. Observance of health protocols by transportation companies can diminish the spread of the disease. However, adhering to health protocols would put additional economic pressure on them. Consequently, providing safe transportation services will require government support. This study examines governments' support policies for safe transportation companies (STCs) through tax exemptions. In this regard, a three-level Stackelberg game model includes government, safe and unsafe transportation companies (UTCs), travel agencies constructed Equilibrium equations are obtained for the decisions of the government, the transport companies, and the passenger company. Then, a case study was conducted on two transportation companies in Isfahan; the effect of tax rates and tax exemption rates on stakeholders has been investigated using the proposed model. Results show that applying for tax exemptions within certain limits on STCs will strengthen them and increase government benefits.