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

Yokoyama, Kazuki (2024): Strategic Interdependence: Quasi-Experiment in the Maritime Industry during the 1880s in Japan.

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.

• Item Type: MPRA Paper
• Language: English
• Keywords: Strategic Interdependence, Duopoly, Price Reduction, Elasticity, Maritime Industry, Shibusawa Eiichi, Iwasaki Yataro
• Subjects: D - Microeconomics > D4 - Market Structure, Pricing, and Design > D43 - Oligopoly and Other Forms of Market Imperfection; N - Economic History > N7 - Transport, Trade, Energy, Technology, and Other Services > N75 - Asia including Middle East; N - Economic History > N8 - Micro-Business History > N85 - Asia including Middle East; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R4 - Transportation Economics > R41 - Transportation: Demand, Supply, and Congestion ; Travel Time ; Safety and Accidents ; Transportation Noise

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Yokoyama, Kazuki. (2024). Strategic Interdependence: Quasi-Experiment in the Maritime Industry during the 1880s in Japan. Discussion Paper, No. 699 (The Society of Economics, Nagoya City University).