Strategic Interdependence: Quasi-Experiment in the Maritime Industry during the 1880s in Japan

Kazuki Yokoyama

MPRA Paper from University Library of Munich, Germany

Abstract: Without a sufficiently informative dataset, it would be difficult to explore strategic interdependencies among firms, such as demand estimation. This paper investigates strategic interdependence through a unique historical case of duopoly in the Japanese maritime industry during the 1880s. Yubin Kisen Mitsubishi, led by Iwasaki Yataro, was a monopoly. A new entrant, Kyodo Un'yu, led by Shibusawa Eiichi, offered superior services and implemented a strategy of one-sided fare reductions. Yubin Kisen Mitsubishi delayed in taking countermeasures. This paper regards this delay as a quasi-experiment, and reveals the process by which Kyodo Un'yu gained market share. A simple elasticity calculation shows that a 1% price cut by Kyodo Un'yu resulted in a 10.065% increase in cargo transport demand.

Keywords: Strategic Interdependence; Duopoly; Price Reduction; Elasticity; Maritime Industry; Shibusawa Eiichi; Iwasaki Yataro (search for similar items in EconPapers)
JEL-codes: D43 N75 N85 R41 (search for similar items in EconPapers)
Date: 2024-08-15
New Economics Papers: this item is included in nep-com, nep-his and nep-tre
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