Abstract
Based on the single pricing method of the high-speed railway (HSR) in China, a pricing strategy without flexibility leads to the problem of extreme fluctuations in passenger flow and difficulty in increasing revenue. In order to achieve sustainable development of the HSR from the perspective of pricing, in this study, we divided the passenger market according to the different factors affecting passengers’ choice behavior, maximized ticket sales revenue with expected travel cost as the reference point, and used prospect theory to construct a differentiated pricing model under elastic demand. A simulated annealing algorithm was used to solve this model under two passenger flow intensities. Taking the Beijing–Shanghai corridor as an example for analysis, the results show that differential pricing can be implemented on the basis of passenger decision-making, and price reductions at off-peak periods will attract passenger flow which will increase ticket sales revenue by 10.41%. During the peak period, prices can be increased to maintain passenger flow, and ticket sales revenue will increase by 7.98%. We also found that increasing passenger expectations have a greater impact on ticket sales. This study provides theoretical and methodological support for the sustainable development of the HSR.
Highlights
With the continuous expansion of the high-speed railway (HSR) in China [1], the formulation of passenger ticket strategies has attracted more attention
We provide a theoretical basis for the sustainable development of the HSR to achieve the goal of balanced passenger flow and market regulation
This paper studied the differential pricing problem of HSR
Summary
With the continuous expansion of the high-speed railway (HSR) in China [1], the formulation of passenger ticket strategies has attracted more attention. In order to develop a better pricing strategy for the HSR to meet more travel needs, prospect theory is introduced for the first time to analyze the psychology of passengers when they are purchasing tickets, with the aim of adjusting the ticket price for each train to meet their expectations, so as to achieve the goal of balancing passenger flow and improving revenue. We confirm the effectiveness of differentiated pricing for the HSR passenger market in China, which has led to a significant increase in ticket revenue. We use a real dataset to address the research question, which includes all ticket purchase records of HSR passengers from 2016 to 2017 in China From these data, we analyze the differences in passengers’ decision-making behaviors and classify them into several categories to apply price discrimination strategies for different passenger markets.
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