Demand information sharing in port concession arrangementsShiyuan Zheng, Ying-En Ge, Xiaowen Fu, (Marco) Nie, Yu and Chi Xie Transportation Research Part B: Methodological, 2020, vol. 138, issue C, 118-143 Abstract: This paper investigates the effects of demand information sharing on concession arrangements and market equilibria, when two ports, each managed by a welfare-maximizing port authority and a profit-maximizing port operator, compete for demands. The problem is formulated as a multi-stage game, in which the authority and the operator at each port first decide whether to share demand information and make concession arrangements; then, the port operators compete à la Cournot. Alternative scenarios are compared to identify the effects of information sharing and market structure. Our analytical results identify the conditions under which demand information sharing is beneficial in port concession arrangements and highlight the importance of the underlying market structure and congestion levels in achieving these benefits. Specifically, we show that information sharing is a source of welfare improvement, and the effects are more significant when the positive externality of information sharing on welfare is large, inter-port competition is strong, and port congestion is costly. However, with no compensation, the port operators have no incentive to share their private information because otherwise, this is likely to increase concession unit-fees, limit their ability to compete effectively with each other, and ultimately reduce their expected profits. Therefore, transfer payments are necessary to encourage information sharing. With this arrangement and the assumed symmetric cost and service structure, we show that a port operator prefers sharing information if the externality of information sharing on welfare exceeds a threshold. Furthermore, when this externality is sufficiently large, the operators at both ports benefit from sharing information. Finally, when the two ports compete in price, we show that a port operator's single-side information sharing may not always benefit its port authority. Keywords: Port; Concession contract; Information sharing; Competition (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:transb:v:138:y:2020:i:c:p:118-143 Ordering information: This journal article can be ordered from DOI: 10.1016/j.trb.2020.03.010 Access Statistics for this article Transportation Research Part B: Methodological is currently edited by Fred Mannering More articles in Transportation Research Part B: Methodological from Elsevier |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.