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In the paper, we examine a contracting problem under asymmetric information in a two-port system involving two freight forwarders and one carrier providing ocean container transportation services between the two ports. We develop a two-stage game model to capture the unique characteristics of the ocean freight transportation with empty container repositioning. We first analyze the forwarders’ optimal strategies, and then characterize the optimal contract for the carrier under symmetric and asymmetric information. Through computational studies, we investigate the impacts of empty container repositioning cost and information asymmetry on the system performances. The numerical experiments reveal that (1) if the market demand is likely to be high, the ocean carrier is more eager to procure private information so as to prevent profit loss from information asymmetry; (2) the degree of information asymmetry has different impacts on the empty container repositioning cost in different transportation directions. © 2020 Elsevier Ltd

In the paper, we examine a contracting problem under asymmetric information in a two-port system involving two freight forwarders and one carrier providing ocean container transportation services between the two ports. We develop a two-stage game model to capture the unique characteristics of the ocean freight transportation with empty container repositioning. We first analyze the forwarders’ optimal strategies, and then characterize the optimal contract for the carrier under symmetric and asymmetric information. Through computational studies, we investigate the impacts of empty container repositioning cost and information asymmetry on the system performances. The numerical experiments reveal that (1) if the market demand is likely to be high, the ocean carrier is more eager to procure private information so as to prevent profit loss from information asymmetry; (2) the degree of information asymmetry has different impacts on the empty container repositioning cost in different transportation directions. © 2020 Elsevier Ltd

In the paper, we examine a contracting problem under asymmetric information in a two-port system involving two freight forwarders and one carrier providing ocean container transportation services between the two ports. We develop a two-stage game model to capture the unique characteristics of the ocean freight transportation with empty container repositioning. We first analyze the forwarders’ optimal strategies, and then characterize the optimal contract for the carrier under symmetric and asymmetric information. Through computational studies, we investigate the impacts of empty container repositioning cost and information asymmetry on the system performances. The numerical experiments reveal that (1) if the market demand is likely to be high, the ocean carrier is more eager to procure private information so as to prevent profit loss from information asymmetry; (2) the degree of information asymmetry has different impacts on the empty container repositioning cost in different transportation directions. © 2020 Elsevier Ltd

This paper studies a transportation market with two firms providing transportation service between two locations. There are potential demands for transportation service in both directions. Firms make decisions on prices. The realized demands reflect the price decisions of both firms. Equipment is required to transport demand from one location to the other. To sustain the business, firms have to reposition empty equipment from a surplus location to a shortage location and incur repositioning cost if the realized demands are unbalanced. We build a mathematical model to study the pricing strategy and analyze the outcome of competition. The optimal pricing strategy of a firm is either to achieve the balance of realized demands or treat these two directions as two separate markets. We also study the outcome of competition. In case of a duopoly market, we corroborate how the profit of a firm is affected by potential imbalance, unit loaded equipment movement cost, unit empty equipment repositioning cost, price sensitivity and the competition intensity. It is interesting to find that profit may increase with potential imbalance and with unit empty equipment repositioning cost. (C) 2008 Elsevier Ltd. All rights reserved.

This paper studies a transportation market with two firms providing transportation service between two locations. There are potential demands for transportation service in both directions. Firms make decisions on prices. The realized demands reflect the price decisions of both firms. Equipment is required to transport demand from one location to the other. To sustain the business, firms have to reposition empty equipment from a surplus location to a shortage location and incur repositioning cost if the realized demands are unbalanced. We build a mathematical model to study the pricing strategy and analyze the outcome of competition. The optimal pricing strategy of a firm is either to achieve the balance of realized demands or treat these two directions as two separate markets. We also study the outcome of competition. In case of a duopoly market, we corroborate how the profit of a firm is affected by potential imbalance, unit loaded equipment movement cost, unit empty equipment repositioning cost, price sensitivity and the competition intensity. It is interesting to find that profit may increase with potential imbalance and with unit empty equipment repositioning cost. (C) 2008 Elsevier Ltd. All rights reserved.

This paper studies a transportation market with two firms providing transportation service between two locations. There are potential demands for transportation service in both directions. Firms make decisions on prices. The realized demands reflect the price decisions of both firms. Equipment is required to transport demand from one location to the other. To sustain the business, firms have to reposition empty equipment from a surplus location to a shortage location and incur repositioning cost if the realized demands are unbalanced. We build a mathematical model to study the pricing strategy and analyze the outcome of competition. The optimal pricing strategy of a firm is either to achieve the balance of realized demands or treat these two directions as two separate markets. We also study the outcome of competition. In case of a duopoly market, we corroborate how the profit of a firm is affected by potential imbalance, unit loaded equipment movement cost, unit empty equipment repositioning cost, price sensitivity and the competition intensity. It is interesting to find that profit may increase with potential imbalance and with unit empty equipment repositioning cost. (C) 2008 Elsevier Ltd. All rights reserved.