Title: The application of uncertain three-player two-stage game to the competition among shipping alliances

Authors: Thi Minh Hoang Do; Gyei-Kark Park; Kyoung-Hoon Choi; Xiangfeng Yang

Addresses: R6316, 3rd floor, Engineering Building 2, Haeyangdaehakro 91, Mokpo-si, Jeonnam, South Korea ' Department of Maritime Transportation System, Mokpo National Maritime University, Haeyangdaehakro 91, Mokpo-si, Jeonnam, South Korea ' Mokpo National Maritime University, Haeyangdaehakro 91, Mokpo-si, Jeonnam, South Korea ' School of Information Technology and Management, University of International Business and Economics, Beijing 100029, China

Abstract: The financial crisis in 2008 has had a negative impact across all economic sectors, especially the shipping industry. In order to strengthen market coverage and to avoid collapse, most of the top container lines have formed strategic alliances; however, the fierce competition among such powerful carrier groups and among group members is becoming a major concern. The purpose of the paper is to examine the competition from a pricing perspective and capacity expansion among the recently established alliances namely 2M+H, The Alliance and Ocean Alliance. An uncertain competition game model is built to decide the Nash equilibrium prices and expansion decisions of the three players. The paper suggests that the number of new ship orders should be reduced at this moment in time and alliances' strategic actions should be made to rebalance the shipping industry.

Keywords: container lines; competition; strategic alliances; game theory; uncertainty theory; expansion decisions; three players.

DOI: 10.1504/IJSTL.2021.118527

International Journal of Shipping and Transport Logistics, 2021 Vol.13 No.6, pp.600 - 623

Received: 03 May 2019
Accepted: 22 Feb 2020

Published online: 11 Oct 2021 *

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