Port integration and competition under public and private ownership

This study investigates the effect of port integration in a mixed oligopoly framework where a public port compete with private ports under price competition. We formulate two integration models, A-integration and B-integration, in which the public port integrates with its neighboring private port or with a non-adjacent private port, respectively. We demonstrate that the effects of A-integration (B-integration) will (not) depend on the gross consumer benefit of the cargo shipment B-integration always makes society better off. We then examine an endogenous port integration game and show that both integration and competition are Nash equilibria under the appropriate government side payments, while B-integration can be socially desirable under public finances.