Port integration and competition under public and private ownership

Xu, Lili and Lee, Sang-Ho (2021): Port integration and competition under public and private ownership.

Abstract

This study investigates the effect of port integration in a mixed oligopoly framework where a public port compete with private ports under price competition. We formulate two integration models, A-integration and B-integration, in which the public port integrates with its neighboring private port or with a non-adjacent private port, respectively. We demonstrate that the effects of A-integration (B-integration) will (not) depend on the gross consumer benefit of the cargo shipment B-integration always makes society better off. We then examine an endogenous port integration game and show that both integration and competition are Nash equilibria under the appropriate government side payments, while B-integration can be socially desirable under public finances.

• Item Type: MPRA Paper
• Language: English
• Keywords: Port integration; Mixed oligopoly; Public ownership; Private ownership; Endogenous port integration
• Subjects: D - Microeconomics > D4 - Market Structure, Pricing, and Design > D43 - Oligopoly and Other Forms of Market Imperfection; L - Industrial Organization > L4 - Antitrust Issues and Policies > L44 - Antitrust Policy and Public Enterprises, Nonprofit Institutions, and Professional Organizations; L - Industrial Organization > L9 - Industry Studies: Transportation and Utilities > L91 - Transportation: General; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R4 - Transportation Economics > R48 - Government Pricing and Policy

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