Digital transformation and port operations: Optimal investment under incomplete information

Bo Lu and Xin Xu

Transport Policy, 2024, vol. 151, issue C, 134-146

Abstract: Port digital transformation requires substantial investments. However, the benefits after transformation are difficult to accurately predict due to incomplete information available to ports. Balancing digital investments with benefits poses a key challenge for ports. We propose a game model based on revenue sharing between the port and the technology company to determine the digital level in equilibrium under incomplete information. Our study reveals that the incomplete information influences digital level of ports. When information is incomplete and ambiguous, the digital level of ports may be lower. However, significant ambiguous does not necessarily decrease the digital level due to risk pooling and agent cost effects. Additionally, revenue sharing reduces the incentive for technology company to withhold private information, and specific sharing ratios are identified. The study also finds that under incomplete information, digital level of port initially increases and then decreases with increasing optimism or the ratio of port's retained revenue. By considering these factors, our study provides guidance for ports in optimal investment strategies for digital transformation.

Keywords: Digital transformation; Port operation; Incomplete information; Game theory; Revenue sharing (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0967070X24001057
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:trapol:v:151:y:2024:i:c:p:134-146

Ordering information: This journal article can be ordered from
http://www.elsevier.com/wps/find/supportfaq.cws_home/regional
https://shop.elsevie ... _01_ooc_1&version=01

DOI: 10.1016/j.tranpol.2024.04.008

Access Statistics for this article

Transport Policy is currently edited by Y. Hayashi

More articles in Transport Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().