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Port integration and competition under public and private ownership

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  • Xu, Lili
  • Lee, Sang-Ho

Abstract

This study investigates the effect of port integration in a mixed oligopoly framework where a public port compete with private ports under price competition. We formulate two integration models, A-integration and B-integration, in which the public port integrates with its neighboring private port or with a non-adjacent private port, respectively. We demonstrate that the effects of A-integration (B-integration) will (not) depend on the gross consumer benefit of the cargo shipment B-integration always makes society better off. We then examine an endogenous port integration game and show that both integration and competition are Nash equilibria under the appropriate government side payments, while B-integration can be socially desirable under public finances.

Suggested Citation

  • Xu, Lili & Lee, Sang-Ho, 2021. "Port integration and competition under public and private ownership," MPRA Paper 106127, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:106127
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    References listed on IDEAS

    as
    1. Laffont, Jean-Jacques & Tirole, Jean, 1986. "Using Cost Observation to Regulate Firms," Journal of Political Economy, University of Chicago Press, vol. 94(3), pages 614-641, June.
    2. repec:wly:soecon:v:82:2:y:2015:p:416-429 is not listed on IDEAS
    3. Matsushima, Noriaki & Takauchi, Kazuhiro, 2014. "Port privatization in an international oligopoly," Transportation Research Part B: Methodological, Elsevier, vol. 67(C), pages 382-397.
    4. Weifen Zhuang & Meifeng Luo & Xiaowen Fu, 2014. "A game theory analysis of port specialization-implications to the Chinese port industry," Maritime Policy & Management, Taylor & Francis Journals, vol. 41(3), pages 268-287, May.
    5. Xu, Lili & Lee, Sang-Ho, 2018. "The timing of environmental policies with excess burden of taxation in free-entry mixed markets," MPRA Paper 83560, University Library of Munich, Germany.
    6. Czerny, Achim & Höffler, Felix & Mun, Se-il, 2014. "Hub port competition and welfare effects of strategic privatization," Economics of Transportation, Elsevier, vol. 3(3), pages 211-220.
    7. Feng Pian & Lili Xu & Yuyan Chen & Sang-Ho Lee, 2020. "Global Emission Taxes and Port Privatization Policies under International Competition," Sustainability, MDPI, vol. 12(16), pages 1-25, August.
    8. DongJoon Lee & Seonyoung Lim & Kangsik Choi, 2017. "Port privatization under Cournot vs. Bertrand competition: a third-market approach," Maritime Policy & Management, Taylor & Francis Journals, vol. 44(6), pages 761-778, August.
    9. Toshihiro Matsumura & Yoshihiro Tomaru, 2013. "Mixed duopoly, privatization, and subsidization with excess burden of taxation," Canadian Journal of Economics, Canadian Economics Association, vol. 46(2), pages 526-554, May.
    10. Wei Xing & Qing Liu & Guangjun Chen, 2018. "Pricing strategies for port competition and cooperation," Maritime Policy & Management, Taylor & Francis Journals, vol. 45(2), pages 260-277, February.
    11. Shengda Zhu & Shiyuan Zheng & Ying-En Ge & Xiaowen Fu & Breno Sampaio & Changmin Jiang, 2019. "Vertical integration and its implications to port expansion," Maritime Policy & Management, Taylor & Francis Journals, vol. 46(8), pages 920-938, November.
    12. Evangelia N. Kaselimi & Theo E. Notteboom & Bruno De Borger, 2011. "A game theoretical approach to competition between multi-user terminals: the impact of dedicated terminals," Maritime Policy & Management, Taylor & Francis Journals, vol. 38(4), pages 395-414, January.
    13. Xu, Lili & Lee, Sang-Ho, 2018. "Environmental policies with excess burden of taxation in free-entry mixed markets," International Review of Economics & Finance, Elsevier, vol. 58(C), pages 1-13.
    14. Sang-Ho Lee & Lili Xu, 2018. "Endogenous timing in private and mixed duopolies with emission taxes," Journal of Economics, Springer, vol. 124(2), pages 175-201, June.
    15. Ali Dadpay & John S. Heywood, 2006. "Mixed Oligopoly In A Single International Market," Australian Economic Papers, Wiley Blackwell, vol. 45(4), pages 269-280, December.
    16. Xu, Lili & Lee, Sang-Ho, 2019. "Tariffs and privatization policy in a bilateral trade with corporate social responsibility," Economic Modelling, Elsevier, vol. 80(C), pages 339-351.
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    Cited by:

    1. Meccheri, Nicola, 2023. "Unionised dockworkers and port ownership structure in an international oligopoly," GLO Discussion Paper Series 1326, Global Labor Organization (GLO).

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    More about this item

    Keywords

    Port integration; Mixed oligopoly; Public ownership; Private ownership; Endogenous port integration;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L44 - Industrial Organization - - Antitrust Issues and Policies - - - Antitrust Policy and Public Enterprise, Nonprofit Institutions, and Professional Organizations
    • L91 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Transportation: General
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy

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