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The impacts of dual overconfidence behavior and demand updating on the decisions of port service supply chain: a real case study from China

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  • Weihua Liu

    (Tianjin University)

  • Xinran Shen

    (Tianjin University)

  • Di Wang

    (Tianjin University)

Abstract

In this paper, the impacts of dual overconfidence behavior and demand updating on the decisions of port service supply chain are studied with the real case study method. A port service supply chain consists of Tianjin Port, a shipping company, and a customer is investigated. A dual overconfidence behavior-based decision model under a demand updating background is built. Then the effects of Tianjin Port’s overconfidence (TPO) behavior and the shipping company’s overconfidence (SCO) behavior on the port service level (PSL), carrying volume and utilities are analyzed. Numerical analysis with real case data is conducted. Several important conclusions are obtained in this paper. Firstly, it is identified that the SCO leads to a decrease in the shipping company’s utilities, while dual overconfidence behavior causes the increase of Tianjin Port’s utilities. Secondly, it is found that the effect of the SCO on the PSL and the effect of TPO on the PSL offset each other which will lead to a threshold in TPO. This threshold is affected by the SCO, and demand updating amplifies this effect. Thirdly, demand updating not only adds to the shipping company’s carrying volume and PSL, but also increases the utilities of both parties. Lastly, it is unexpectedly found that there are interactions between demand updating and dual overconfidence behavior.

Suggested Citation

  • Weihua Liu & Xinran Shen & Di Wang, 2020. "The impacts of dual overconfidence behavior and demand updating on the decisions of port service supply chain: a real case study from China," Annals of Operations Research, Springer, vol. 291(1), pages 565-604, August.
    • Handle: RePEc:spr:annopr:v:291:y:2020:i:1:d:10.1007_s10479-018-3095-5
    DOI: 10.1007/s10479-018-3095-5
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