Requires Subscription
Technological and Economic Development of Economy ISSN 2029-4913 / eISSN 2029-4921 2018 Volume 24 Issue 4: 1776–1800 https://doi.org/10.3846/20294913.2016.1213206 TO COOPERATE OR TO COMPETE: A GAME THEORETIC ANALYSIS ON PORTS IN MALAYSIA AND SINGAPORE Joshua IGNATIUS1*, Tian Siang TAN2, Lalitha DHAMOTHARAN3, Mark GOH4 1, 3Warwick Manufacturing Group, University of Warwick, Coventry, CV4 7AL, UK 1, 2School of Mathematical Sciences, Universiti Sains Malaysia, 11800 Minden, Penang, Malaysia 3School of Management, Universiti Sains Malaysia, 11800 Minden, Penang, Malaysia 4NUS Business School and the Logistics Insitute-Asia Pacific, National University of Singapore, 15 Kent Ridge Drive, Singapore Received 16 November 2015; accepted 22 May 2016 Abstract. The busiest container ports in the world are mostly situated in the Asian region, thus intensifying inter-port competition. Particularly unique in this region, is the shared history between Malaysia and Singapore, which was once ruled-under the British empire, has since become econom- ic rivals for the Far East – Europe trade route. This provides a suitable context to investigate whether competition or a strategic alliance should be adopted for ports in terms of its benefit to the industry in the region as a whole. Specifically, this paper analyses the ocean freight traffic demand for the Far East-Europe route among three main transshipment ports located in Malaysia and Singapore: Port of Singapore (PSA), Port Klang (PKL), and Port of Tanjung Pelepas (PTP). The paper provides a scenario analysis of the 3-way interaction through a game theoretic model. The results suggest that a strategic alliance between PSA and PTP generates greater profitability to the current hub and spoke network, while PKL should not commit to any cooperative strategy with either PSA or PTP.
[Show full text]