Port Privatization in an International Oligopoly
We investigate how port privatization affects port charges, firm profits, and welfare. Our model consists of an international duopoly with two ports and two markets. When the unit transport cost is large, privatization of ports decreases the prices for port usage, although neither government has an incentive to privatize its port. The equilibrium governmental decisions are inconsistent with the desirable outcome if the unit transport cost is not large enough. The smaller countryfs government is more likely to privatize its port, although the larger countryfs government is more likely to nationalize its port to protect its domestic market.
Year of publication: |
2013-02
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Authors: | Matsushima, Noriaki ; Takauchi, Kazuhiro |
Institutions: | Institute of Social and Economic Research (ISER), Osaka University |
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