Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/190326 
Year of Publication: 
2018
Series/Report no.: 
Economics Discussion Papers No. 2018-84
Publisher: 
Kiel Institute for the World Economy (IfW), Kiel
Abstract: 
The authors examine a mixed duopoly market with Cournot or Bertrand competition between a purely private port (port 1) and a partial public port (port 2). Considering both horizontal and vertical differentiation between the two ports, they analytically derive the welfare effect of privatization of port 2 and determine the optimal degree of privatization. Under Cournot or Bertrand competition, it is demonstrated that the social desirable private level of port 2 varies among full privatization, partial privatization and full nationalization, which hinges mainly upon the market size, both horizontal and vertical differentiation between the two ports and the marginal operation cost of each port. As a result, there is not necessarily a one-size-fits-all strategy for port privatization, and it is important for policymakers to consider the effects of market demand, port competition factors in port privatization.
Subjects: 
port
competition
privatization
horizontal and vertical differentiation
JEL: 
D43
L33
Creative Commons License: 
cc-by Logo
Document Type: 
Working Paper

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