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Analysis of strategic pricing in the port sector: The network approach


Nguyen, H-O and Chin, A and Tongzon, J and Bandara, M, Analysis of strategic pricing in the port sector: The network approach, Maritime economics and logistics, 18, (3) pp. 264-281. ISSN 1479-2931 (2016) [Refereed Article]

Copyright Statement

Copyright 2015 Macmillan Publishers Ltd

DOI: doi:10.1057/mel.2015.9


This article demonstrates how interaction between ports in a network can be analysed in two stages. The first stage is the analysis of the price response functions and it examines how a port sets its prices for infrastructure services given those of its competitors. The second stage involves the identification of network relationships and analyses strategic interactions based on the results obtained from the first stage. The procedure is applied to analyse the network relationships between ports in three regions in Australia, namely Queensland, South Australia and Victoria, and Western Australia. The results provide insights into strategic interactions in port networks not previously seen in the literature. Especially, it has been found that, while some ports appear to strategically interact with each other in price setting, other ports prefer to set their own prices independently of each other. Moreover, strategic pricing can be asymmetric rather than symmetric. The result of our analysis has important implications for port management and policymakers. For example, while the existence of ‘complementary’ strategic pricing may not be seen as evidence of price leadership, it indicates that port users may not be able to shop around among competing ports if the existing port increases its prices.

Item Details

Item Type:Refereed Article
Keywords:port pricing; port competition; port networks; simultaneous equation modelling; transport policy; Australia
Research Division:Commerce, Management, Tourism and Services
Research Group:Transportation, logistics and supply chains
Research Field:Transportation, logistics and supply chains not elsewhere classified
Objective Division:Transport
Objective Group:Other transport
Objective Field:Other transport not elsewhere classified
UTAS Author:Nguyen, H-O (Associate Professor Oanh Nguyen)
ID Code:104224
Year Published:2016 (online first 2015)
Web of Science® Times Cited:7
Deposited By:Maritime and Logistics Management
Deposited On:2015-11-04
Last Modified:2018-04-12

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