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Transport contract optimization under information asymmetry: an example


Author Info

  • Xavier Brusset

    (IAG, Université Catholique de Louvain, Louvain la Neuve, Belgium)

  • Nico Temme

    (Centrum voor Wiskunde en Informatica, Amsterdam, Netherlands)


The present paper shows why information asymmetry and bivariate stochastic demand and spot price induce different behaviours and economic inefficiency in a carrier – shipper relationship. An example is offered of a single period, single echelon, shipper-carrier transport model where demand addressed to the shipper and the spot transport price, two exogenous stochastic variables, follow a bivariate exponential probability distribution function. We evaluate the objective functions of the carrier and shipper over one period reiterated with a mix of long-term and short-term procurement strategies under five scenarios of information sharing. Some clues as to ways of solving for other types of bivariates are provided.

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Bibliographic Info

Paper provided by EconWPA in its series Econometrics with number 0512005.

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Length: 30 pages
Date of creation: 07 Dec 2005
Date of revision:
Handle: RePEc:wpa:wuwpem:0512005

Note: Type of Document - pdf; pages: 30. A discussion of game theoretic behaviour of a transport service provider and a shipper when demand and price of transport can vary dependently.
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Related research

Keywords: supply chain management; coordination; information sharing; decision anylisis; bivariate statistics;

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  1. Grieger, Martin, 2003. "Electronic marketplaces: A literature review and a call for supply chain management research," European Journal of Operational Research, Elsevier, vol. 144(2), pages 280-294, January.
  2. Wu, D. J. & Kleindorfer, P. R. & Zhang, Jin E., 2002. "Optimal bidding and contracting strategies for capital-intensive goods," European Journal of Operational Research, Elsevier, vol. 137(3), pages 657-676, March.
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