A three-player oligopoly model is devised to capture the competitive interaction between operators of the Hong Kong container terminals, the Hong Kong midstream and the Singapore container terminals in providing container handling services. The oligopoly model is then estimated statistically and thereby the structural parameters can be identified. The results of the estimation confirm a substitutability between the services supplied by operators of different types (terminal versus midstream) and different locations (Hong Kong versus Singapore). Moreover, the model proposed in this article generates forecasts of demand for Hong Kong's container handling services that are more accurate than those reported by the government authority, and suggests an earlier construction of new terminals to meet future demand.
- Error-correction model
ASJC Scopus subject areas
- Management of Technology and Innovation
- Strategy and Management
- Safety, Risk, Reliability and Quality