Optimal concession contracts for landlord port authorities under price competition of terminal operators
by Hsiao-Chi Chen; Yen-Hung Lin; Shi-Miin Liu
International Journal of Shipping and Transport Logistics (IJSTL), Vol. 9, No. 2, 2017

Abstract: This paper extends Chen and Liu's (2014) study by assuming that terminal operators compete in prices, instead of in quantities. Under this setting, the paper shows that the two-part tariff contract is the port authority's best choice. In addition, the paper refines the outcomes of Chen and Liu (2014) by showing that the two-part tariff contract, rather than the unit-fee contract, is the optimal choice for the port authority if the marginal service costs of the less efficient operator are small. The results presented here and Chen and Liu (2014) imply that the two-part tariff contract is the best solution for landlord port authorities under different competing modes and cost structures of terminal operators, as well as under various service differentiation levels of the operators. The port authority and the more efficient operator may prefer price or quantity competition. Terminal operators' service differentiation levels and their marginal service costs will determine the results. However, the less efficient operator will always prefer quantity to price competition if it survives in the market.

Online publication date: Tue, 28-Feb-2017

The full text of this article is only available to individual subscribers or to users at subscribing institutions.

 
Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.

Pay per view:
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.

Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Shipping and Transport Logistics (IJSTL):
Login with your Inderscience username and password:

Username:        Password:          Forgotten your password?

Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.

If you still need assistance, please email subs@inderscience.com