WSEAS Transactions on Business and Economics


Print ISSN: 1109-9526
E-ISSN: 2224-2899

Volume 16, 2019

Notice: As of 2014 and for the forthcoming years, the publication frequency/periodicity of WSEAS Journals is adapted to the 'continuously updated' model. What this means is that instead of being separated into issues, new papers will be added on a continuous basis, allowing a more regular flow and shorter publication times. The papers will appear in reverse order, therefore the most recent one will be on top.

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

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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.

KEYWORDS: Subsidy model, transportation operator, non-cooperative solution

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WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / 2224-2899, Volume 16, 2019, Art. #8, pp. 60-67


Copyright Β© 2018 Author(s) retain the copyright of this article. This article is published under the terms of the Creative Commons Attribution License 4.0