Port privatization under Cournot vs. Bertrand competition: a third-market approach

Lee, DongJoon; Lim, Seonyoung; Choi, Kangsik

doi:10.1080/03088839.2017.1336262

Cited by 18 publications

(8 citation statements)

References 25 publications

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“…In the recent years, application of gametheoretical approach has been observed in the analysis of both inter-and intra-port competition. Among the most recent application in maritime studies, Lee, Lim, and Choi (2017) considered both Bertrand and Cournot competition, and found that imperfect substitutability defines port ownership structure under Bertrand competition while it remains the same for all players in Cournot competition. Song et al (2016) applied a two-stage non-cooperative game to investigate both vertical and horizontal interactions among liner companies and ports.…”

Section: Literature Reviewmentioning

confidence: 99%

“…We employed the Bertrand game because the competition among the terminals is formed in terms of handling charges (Luo, Liu, and Gao 2010). The Cournot game is applicable when competition is in terms of quantity (Lee, Lim, and Choi 2017) and the Stackelberg is applicable for leader-follower competition (Saeed and Larsen 2014). As the result of the first stage depends on the outcome of the second stage, this game is played backwards.…”

Section: Model Specificationmentioning

confidence: 99%

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‘Tool port’ to ‘landlord port’: a game theory approach to analyse gains from governance model transformation

Munim

Saeed

Larsen

2018

Maritime Policy & Management

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This study investigates potential port users' surplus and terminal operators' profits due to transforming port governance from the 'tool port' model to the 'landlord port' model. Although the landlord port model is one of the most adopted and successful port governance models, many ports still operate under other models. Chittagong Port, the largest port in Bangladesh, currently operates under the tool port model, while the country's second-largest port, Mongla Port, operates under the service port model. Chittagong Port is currently facing many challenges, including capacity expansion and renovation of port facilities. Therefore, we form four hypothetical situations for port governance model transformation, assuming that Chittagong Port will transform to the landlord port model but that Mongla Port will run under the existing governance model. Estimating a Bertrand game model, we present a cost-benefit analysis for port users and terminal operators (or port authorities) in hypothetical game situations. The results reveal that privatising one of the container terminals under a landlord setting is the most profitable scenario for Chittagong Port Authority, but privatising all terminals of Chittagong Port yields the highest users' surplus. However, privatising two of the terminals while they cooperate yields the lowest users' surplus.

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Section: Literature Reviewmentioning

confidence: 99%

Section: Model Specificationmentioning

confidence: 99%

‘Tool port’ to ‘landlord port’: a game theory approach to analyse gains from governance model transformation

Munim

Saeed

Larsen

2018

Maritime Policy & Management

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“…Direct railroad or highway links between an inland terminal and its seaport are examples of such corridors. Because inland terminals can serve as the entrance of a port and extend the capacity of sea terminals (Van den Berg and De Langen 2011; Rodrigue andNotteboom 2012, Lee, Lim, andChoi 2017), developing such direct links does not directly benefit inland shippers that choose competing ports.…”

Section: Main Modeling Aspectsmentioning

confidence: 99%

Port competition with accessibility and congestion: a theoretical framework and literature review on empirical studies

Wan

Zhang

2017

Maritime Policy & Management

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This review interprets recent studies of the interactions between the competition of gateway seaports and the accessibility of landside transportation links to inland regions. Port competition is treated as part of a rivalry between two transportation chains. This paper identifies the main modeling approaches and defines the different types of hinterland access systems described in the literature. A general theoretical framework is then proposed to incorporate those key components. The importance of the proposed framework is revealed by comparing and extending results from the literature. Major assumptions that need further empirical verification are identified and discussed, and related empirical studies are reviewed. Finally, avenues for further research are discussed.

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“…The ports in an oligopoly market are suggested to join hand to improve their profits. Lee et al (2017) evaluate the port strategy in view of all trading countries and compare the equilibriums under Bertrand and Cournot competition. They conclude that exporting country prefers Cournot competition and importing country prefers Bertrand competition.…”

Section: Literature Reviewmentioning

confidence: 99%

A competitive analysis of port of Hong Kong: from external to internal

Liu

Yang

2020

J. shipp. trd.

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This paper aims to analyse the competitive equilibrium of Hong Kong international port after the cooperation among terminal operators. To achieve our research objective, a comprehensive analysis framework is proposed. We assume that the port services provided by Shenzhen and Hong Kong have heterogeneity, thus apply Cournot price competition model to understand the external competition. We find that the heterogeneity level can affect the demand of Hong Kong international port. For different heterogeneity levels, different competitive equilibriums among terminal operators of Hong Kong are discussed. We further apply Edgeworth model and Stackelberg Leadership Model to describe the internal competition of Hong Kong international port. Based on analysis, some recommendations are provided to the terminal operators of Hong Kong.

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Port privatization under Cournot vs. Bertrand competition: a third-market approach

Cited by 18 publications

References 25 publications

‘Tool port’ to ‘landlord port’: a game theory approach to analyse gains from governance model transformation

‘Tool port’ to ‘landlord port’: a game theory approach to analyse gains from governance model transformation

Port competition with accessibility and congestion: a theoretical framework and literature review on empirical studies

A competitive analysis of port of Hong Kong: from external to internal

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