Game analysis on road freight transport service in China

Abstract

Currently, price wars between road freight transport enterprises are intense. The road freight transport industry has been developing very slowly in China. Faced the fact that competition within road freight transport industry is getting fierce in China, this essay is based on the perspective of game theory, adopting the Bertrand oligopoly model to analyze the price behavior among road freight transport enterprises. Game theory (pure strategic Nash equilibrium & admixture strategic Nash equilibrium) has been used to analyze the relation between price of transport service and service quality within road freight transport industry. It is pointed out that making different pricing policies due to different service qualities is not only profitable for road freight transport enterprises, but also beneficial to the overall improvement of road freight transport service quality. It is also suggested that different road freight transport service prices reflect the positive correlation between road freight transport service price and road freight transport service quality.