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Strategic Pricing in Newly Privatised Ports

Authors
  • Ashar, Asaf1
  • 1 National Ports & Waterways Institute, Louisiana State University, 2300 Clarendon Blvd., Suite 300, Arlington, VA, 22201, USA , Arlington (United States)
Type
Published Article
Journal
International journal of maritime economics
Publisher
Palgrave Macmillan UK
Publication Date
Mar 01, 2001
Volume
3
Issue
1
Pages
52–78
Identifiers
DOI: 10.1057/palgrave.ijme.9100002
Source
Springer Nature
Keywords
License
Yellow

Abstract

Following privatisation, ports face an immediate need to set their prices. For this, they should assess their strategic environment, including: (a) the complex, network-like structure of their port system consisting of principal and intermediary parties; (b) the flow of services and related charges among the above-mentioned parties; (c) the differentiation and price discrimination in the market for port services; (d) the high concentration on both the demand and supply sides of this market; and (e) the mixture of competitive and cooperative behaviours among market agents. The methodology for price setting presented in this paper is based on a systematic assessment of the strategic environment. The methodology employs two novel diagnostic tools: a charge-flow diagram for analysing the allocation of port charges among principal and intermediate parties, and a game tree for analysing the port/competitors, action/reaction dynamics of the oligopolistic market. The methodology is discussed and illustrated using the case of the Port of Cartagena, Colombia.

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