Optimization of Intercity Railway Subsidy Model from the Perspective of Government-Enterprise Game Theory

Objective At present, there are certain issues in China concerning subsidy funding in the construction and operation of intercity railways. It is therefore necessary to optimize the subsidy model in light of the intercity railway characteristics.

Method Using the evolutionary game theory approach, the interests of both the government and intercity railway operating enterprises are comprehensively considered to balance their benefit relationship. Based on a case study of intercity railways in Henan Province, the behavioral decision preferences of both parties under different subsidy policies are analyzed and discussed. The positive role of performance-based subsidies in improving subsidy utilization efficiency is demonstrated, and practical recommendations are proposed to support government policy updates and promote the sustainable development of intercity railways.

Result & Conclusion  Traditional subsidy policies fail to stimulate the enthusiasm of intercity railway operating enterprises under loss-compensation subsidy conditions, which tends to result in low operational efficiency. Introducing performance-based subsidies can alleviate the interest conflicts between the government and enterprises, change the behavior of intercity railway operating enterprises, thereby achieving an increase in enterprise revenue as well as improved utilization efficiency of government subsidy funds. Considering the differences among intercity railways, differentiated performance standards may be adopted with varying allocation weights based on factors such as operating vehicle kilometers, train frequency, and passenger volume. Such performance-based subsidy mechanisms tailored to local are more suitable for different practical scenarios.