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Modeling the effects of competition on seaport terminal awarding

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  • Yip, Tsz Leung
  • Liu, John Jianhua
  • Fu, Xiaowen
  • Feng, Jiejian

Abstract

In the maritime transport industry, a terminal concession often specifies the competition conditions during the concession period. This study proposes a game model with which the effects of competition for seaport terminal awards can be studied. The modeling results suggest that (a) a terminal operator always prefers to control more terminals in the region; (b) if all terminal operators expand their operations to every port, they will be worse off due to an increase of inter- and intra-port competitions, a situation similar to the prisoners׳ dilemma; and (c) when a port authority has significant market power, it prefers to introduce inter- and intra-port competition, rather than allowing one operator to monopolize all terminals. (d) multiple equilibria may be observed in concession awarding depending on market characteristics associated to a particular market. Anecdotal observations consistent with these modeling results are presented and discussed.

Suggested Citation

  • Yip, Tsz Leung & Liu, John Jianhua & Fu, Xiaowen & Feng, Jiejian, 2014. "Modeling the effects of competition on seaport terminal awarding," Transport Policy, Elsevier, vol. 35(C), pages 341-349.
    • Handle: RePEc:eee:trapol:v:35:y:2014:i:c:p:341-349
    DOI: 10.1016/j.tranpol.2014.04.007
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