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Transport contract optimization under information asymmetry: an example


  • 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.

Suggested Citation

  • Xavier Brusset & Nico Temme, 2005. "Transport contract optimization under information asymmetry: an example," Econometrics 0512005, EconWPA.
  • 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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    References listed on IDEAS

    1. 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.
    2. 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.
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    Cited by:

    1. Berling, Peter & Eng-Larsson, Fredrik, 2016. "Pricing and timing of consolidated deliveries in the presence of an express alternative: Financial and environmental analysis," European Journal of Operational Research, Elsevier, vol. 250(2), pages 590-601.

    More about this item


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

    JEL classification:

    • C44 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Operations Research; Statistical Decision Theory
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production

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