Capacity management by global shipping alliances: findings from a game experiment

The present article uses game experiments to understand the dynamics of oligopolistic competition in liner shipping markets. We show how a limited number carriers, interacting over time, acting independently or grouped into global alliances, are able effectively and jointly reduce excess capacity. A serious (called TRALIN) has been designed this end, mimicking market where four five alliances compete on set 12 routes, connecting ports call for few sequential voyages. Carriers initially subject low profits due over-capacity have anticipate competitor capacity decisions vessel deployment simultaneously. Results from 18 experimental games with 4644 were collected statistically analysed confirm main tenets oligopoly theory highlight existence learning effect successive interactions (rounds games). Our results suggest that ‘coordinated’ reduction is more likely occur when competitors limited, but even excessive high, urging need cooperation; amongst participants detected time. Serious flexible tools improving our understanding competition, organization networks, role played by alliances. This tool may help practitioners evolving within competitive process, what factors influence it. Although voluntarily made simplistic purpose experiments, design allows one focus as applied