Posted by Social Science Research Network
Are Vessel Sharing Agreements Pro-Competitive?
By Federico Quartieri (University of Naples Parthenope)
Abstract: Attention is focussed on a type of strategic alliance of the container shipping industry: vessel sharing agreements. In such consortia carriers jointly provide – but independently sell – a liner service. The strategic alliances studied in this work have not been extensively analyzed in the theoretical literature; a new model is proposed that embodies their main distinguishing features. By it, an examination is provided of the effects on equilibrium prices, equilibrium aggregate quantities and consumer welfare of the formation and enlargement of vessel sharing agreements. A positive answer is developed to the question raised in the title of the present work that supports a laissez-faire policy for these consortia.
