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Game-theoretical models of competition analysis and pricing strategy for two modes for repairing damaged marine structures at sea

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  • Zhao, Ruijia
  • Xie, Xinlian
  • Li, Xinyang
  • Li, Guodong

Abstract

Novel support-and-repair ships could technically perform comprehensive maintenance and repair work for damaged marine structures on a deep sea. This paper analyses competition in the repair market for marine structures between the shipyard mode and the support-and-repair ship mode by using game theory. First, we present a game-theoretical model of competition analysis and pricing strategy based on the lowest expense and derive a closed form to calculate the optimal pricing strategy, market share and maximum profit by using partial differentiation with respect to prices. Furthermore, a second game-theoretical model of competition analysis and pricing strategy considering the choice preference of the repair decision maker is formulated. Based on the characteristics of this model, we use the discretization method to decompose it into a finite number of sub-models and design an iterative algorithm to efficiently address the sub-models. Finally, the calculation results prove the high value and attractive prospects for applying the support-and-repair ship mode in repairing marine structures at sea.

Suggested Citation

  • Zhao, Ruijia & Xie, Xinlian & Li, Xinyang & Li, Guodong, 2020. "Game-theoretical models of competition analysis and pricing strategy for two modes for repairing damaged marine structures at sea," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 142(C).
    • Handle: RePEc:eee:transe:v:142:y:2020:i:c:s1366554520307031
    DOI: 10.1016/j.tre.2020.102052
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    1. Zhao, Ruijia & Song, Yunting & Wang, Haoze & Xie, Xinlian, 2022. "Bi-objective optimisation model and its exact solution method of profit and market share of novel repair-and-support ships based on game theory," Omega, Elsevier, vol. 113(C).

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