Alliance formation in a cooperative container shipping game: Performance of a real options investment approach

This paper develops an integrated alliance formation and investment simulation model within container shipping. In light of low profitability and frequent alliance changes, the optimal choice of investment approach is addressed. This is achieved by comparing the performance of three investment approaches: real options analysis, and individual and collective discounted cash flow. It turns out that the real options trigger performs best, especially under conditions of high competitive intensity and freight rate volatility. A sensitivity analysis concludes that competitive intensity, alliance complexity cost, and freight rate volatility lead to alliance instability and that shorter lead times increase industry concentration.

• Record URL:
  https://doi.org/10.1016/j.tre.2017.02.005
• Record URL:
  http://www.sciencedirect.com/science/article/pii/S136655451630463X
• Availability:
  • Find a library where document is available. Order URL: http://worldcat.org/issn/13665545
• Supplemental Notes:
  • Abstract reprinted with permission of Elsevier.
• Authors:
  • Rau, Philipp
  • Spinler, Stefan
• Publication Date: 2017-5

Language

• English

Media Info

• Media Type: Web
• Features: Appendices; Figures; References; Tables;
• Pagination: pp 155-175
• Serial:
  • Transportation Research Part E: Logistics and Transportation Review
  • Volume: 101
  • Publisher: Elsevier
  • ISSN: 1366-5545
  • Serial URL: http://www.sciencedirect.com/science/journal/13665545

Subject/Index Terms

• TRT Terms: Containerships; Cooperation; Game theory; Logistics; Maritime industry; Shipping; Strategic alliances
• Subject Areas: Administration and Management; Freight Transportation; Marine Transportation;

Filing Info

• Accession Number: 01634240
• Record Type: Publication
• Files: TRIS
• Created Date: May 1 2017 9:45AM