Port Privatization in an International Oligopoly

Noriaki Matsushima and Kazuhiro Takauchi

ISER Discussion Paper from Institute of Social and Economic Research, Osaka University

Abstract: We investigate how port privatization affects port charges, firm profits, and welfare. Our model consists of an international duopoly with two ports and two markets. When the unit transport cost is large, privatization of ports decreases the prices for port usage, although neither government has an incentive to privatize its port. The equilibrium governmental decisions are inconsistent with the desirable outcome if the unit transport cost is not large enough. The smaller country's government is more likely to privatize its port, although the larger country's government is more likely to nationalize its port to protect its domestic market.

Date: 2013-02
New Economics Papers: this item is included in nep-bec, nep-com, nep-ind and nep-tre
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Journal Article: Port privatization in an international oligopoly (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:dpr:wpaper:0864

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