Evolutionary stability strategies of tacit collusion in supervised container terminals

Abstract

Abstract To investigate the long-term effects of the Port Authority’s supervision strategies on the container terminal’s collusion strategies, this study constructs a two-sided evolutionary game model consists of the Port Authority and a container terminal based on evolutionary game theory which usually examine a game’s long-term trends. Under the premise that the container terminal’s net profits from collusion strategy are greater than those from non-collusion strategy, the stability analysis demonstrates that the container terminal tend to choose collusion strategy, and the Port Authority tends to choose lax supervision strategy when the fine received by the container terminal is less than the Port Authority’s cost; the container terminal tends to choose collusion strategy, and the Port Authority tends to choose strict supervision strategy when the fine received by the container terminal is greater than the Port Authority’s cost and the sum of the fine and subsidy is less than the difference in the container terminal’s profits from collusion strategies. Finally, the numerical simulation results confirm the robustness of the stability analysis. These results can guide and benefit relevant stakeholders in the sustainable development of the container shipping supply chain.

Keywords

• Container shipping supply chain
• Evolutionary game theory
• Evolutionary stable strategy (ESS)
• Port Authority
• Collusion
• Strict/lax supervision