Passive or proactive capacity sharing? A perspective of cooperation and competition between two regional ports

Lang Xu, Fengjue Xie and Chuanxu Wang

Maritime Policy & Management, 2022, vol. 49, issue 4, 492-509

Abstract: Port operations in an uncertain environment and compete with nearby ports in a same region to incentive carriers. In this paper, we consider a game-theoretical model to analyze the co-opetition between two ports with capacity sharing. Three competitive game interactions are discussed, namely, benchmark model, passive sharing, and proactive sharing to maximize the payoff by determining optimal berth quantity and service price. The observations show that when faced with a strengthened rival with sufficient capacity, the optimal ports’ decision for the capacity sharing mode is determined by the tradeoff between the benefit that is gained from the sharing capacity and the losses that are caused by port competition. Moreover, our research comprehensively examines how the port operation cost and the difference between the potential capacity demand of two terminals affect ports’ optimal strategy selection and presents a broad set of decision outcomes, which provides new insights for port coopetition.

Date: 2022
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DOI: 10.1080/03088839.2021.1876938

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