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Accelerating the adoption of automated vehicles by subsidies: A dynamic games approach

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  • Luo, Qi
  • Saigal, Romesh
  • Chen, Zhibin
  • Yin, Yafeng
Abstract
Early deployment of automated vehicles (AVs) may likely cause a loss of efficiency in the transportation system. However, after there are a sufficient number of such vehicles in the traffic stream, many benefits can be realized. It thus appears sensible to provide subsidies to promote the early adoption of AVs and shorten the transition period. This paper investigates an optimal subsidy policy that accelerates the deployment of AVs from lower to higher market penetration rates. The policy can maximize the government agency’s expected total payoff associated with the AV deployment. The main contribution is a dynamic games approach that considers the uncertainty in the market forecast and the information asymmetry between the government agency and the subsidized entities.

Suggested Citation

  • Luo, Qi & Saigal, Romesh & Chen, Zhibin & Yin, Yafeng, 2019. "Accelerating the adoption of automated vehicles by subsidies: A dynamic games approach," Transportation Research Part B: Methodological, Elsevier, vol. 129(C), pages 226-243.
    • Handle: RePEc:eee:transb:v:129:y:2019:i:c:p:226-243
    DOI: 10.1016/j.trb.2019.09.011
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    14. Dawid, Herbert & Di, Xuan & Kort, Peter M. & Muehlheusser, Gerd, 2024. "Autonomous vehicles policy and safety investment : An equilibrium analysis with endogenous demand," Other publications TiSEM a8b169e7-97f0-4b83-b117-a, Tilburg University, School of Economics and Management.
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    17. Mo, Lipo & Cui, Zhaoyu & Jia, Rongwen & Dong, Kangyin & Zhao, Chuan, 2024. "How does autonomous vehicles affect taxi industry? A two-stage Van Damme based tripartite evolutionary game perspective," Research in Transportation Economics, Elsevier, vol. 103(C).
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    19. Liangui Peng & Ying Li & Hui Yu, 2021. "Effects of Dual Credit Policy and Consumer Preferences on Production Decisions in Automobile Supply Chain," Sustainability, MDPI, vol. 13(11), pages 1-19, May.
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    21. Li, Pengbo & Tian, Lijun & Xiao, Feng & Zhu, Hongwei, 2022. "Can day-to-day dynamic model be solved analytically? New insights on portraying equilibrium and accommodating autonomous vehicles," Transportation Research Part B: Methodological, Elsevier, vol. 166(C), pages 374-395.

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