A matching model for the backhaul problem
AbstractThe 'backhaul problem' is characterized by an imbalance in transport flows between locations. In a perfectly competitive framework with perfect information, the price of transport from low demand locations to high demand locations, the so-called backhaul price, drops to zero when the imbalance is sufficiently large. However, this result is inconsistent with empirical observations for many competitive transport markets (e.g. taxi and inland navigation markets). In this paper, we develop a matching model to show that a deviation from perfect information may address this inconsistency. We argue that carriers' search time to locate customers plays an important role in the determination of prices. We demonstrate that carriers are compensated for a part of the transport cost and for the time they search for customers. This implies positive backhaul prices. The matching model is numerically applied to the inland navigation shipping market in the Rhine river area in Western-Europe. We find that backhaul prices are substantial.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Elsevier in its journal Transportation Research Part B: Methodological.
Volume (Year): 44 (2010)
Issue (Month): 4 (May)
Contact details of provider:
Web page: http://www.elsevier.com/wps/find/journaldescription.cws_home/548/description#description
Other versions of this item:
- R40 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - General
- R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Sjostrom William, 2004. "Ocean Shipping Cartels: A Survey," Review of Network Economics, De Gruyter, vol. 3(2), pages 1-28, June.
- James E. Anderson & Eric van Wincoop, 2004.
NBER Working Papers
10480, National Bureau of Economic Research, Inc.
- Olaf Jonkeren & Erhan Demirel & Jos van Ommeren & Piet Rietveld, 2011.
"Endogenous transport prices and trade imbalances,"
Journal of Economic Geography,
Oxford University Press, vol. 11(3), pages 509-527, May.
- Behrens, Kristian & Gaigne, Carl & Ottaviano, Gianmarco I.P. & Thisse, Jacques-Francois, 2006.
"How density economies in international transportation link the internal geography of trading partners,"
Journal of Urban Economics,
Elsevier, vol. 60(2), pages 248-263, September.
- BEHRENS, Kristian & GAIGNE, Carl & OTTAVIANO, Gianmarco I.P. & THISSE, Jacques-François, . "How density economies in international transportation link the internal geography of trading partners," CORE Discussion Papers RP -1870, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Paul Krugman, 1990.
"Increasing Returns and Economic Geography,"
NBER Working Papers
3275, National Bureau of Economic Research, Inc.
- Ricardo A. Lagos, .
""An Alternative Approach to Market Frictions: An Application to the Market for Taxicab Rides'',"
CARESS Working Papres
96-09, University of Pennsylvania Center for Analytic Research and Economics in the Social Sciences.
- Ricardo A. Lagos, . "An Alternative Approach to Market Frictions: An Application to the Market for Taxicab Rides," Penn CARESS Working Papers 058589d20e3fbe4e559adb44b, Penn Economics Department.
- Pissarides, Christopher A, 1994.
"Search Unemployment with On-the-Job Search,"
Review of Economic Studies,
Wiley Blackwell, vol. 61(3), pages 457-75, July.
- Behrens, Kristian & Gaigné, Carl & Thisse, Jacques-François, 2009. "Industry location and welfare when transport costs are endogenous," Journal of Urban Economics, Elsevier, vol. 65(2), pages 195-208, March.
- Arnott, Richard, 1996. "Taxi Travel Should Be Subsidized," Journal of Urban Economics, Elsevier, vol. 40(3), pages 316-333, November.
- Olaf Jonkeren & Piet Rietveld & Jos van Ommeren, 2007. "Climate Change and Inland Waterway Transport: Welfare Effects of Low Water Levels on the river Rhine," Journal of Transport Economics and Policy, London School of Economics and University of Bath, vol. 41(3), pages 387-411, September.
- Christopher A. Pissarides, 2000. "Equilibrium Unemployment Theory, 2nd Edition," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262161877, December.
- Wheaton, William C, 1990. "Vacancy, Search, and Prices in a Housing Market Matching Model," Journal of Political Economy, University of Chicago Press, vol. 98(6), pages 1270-92, December.
- Jong-Wha Lee & Warwick J. McKibbin & Yung Chul Park, 2006. "Transpacific Trade Imbalances: Causes and Cures," Discussion Paper Series 0601, Institute of Economic Research, Korea University.
- Mortensen, Dale T & Pissarides, Christopher A, 1999. "Unemployment Responses to 'Skill-Biased' Technology Shocks: The Role of Labour Market Policy," Economic Journal, Royal Economic Society, vol. 109(455), pages 242-65, April.
If references are entirely missing, you can add them using this form.