A game theoretic “mode-choice” model for freight transportation

This paper uses simple game theory to analyze a situation where two agents compete in the transport market. The modeling frame is that of a mode choice model, where the two mode options are boat or car transportation. The basic findings are that non pareto optimal (car, car) equilibrium outcomes, may occur in a surprisingly large amount of cases. Additionally, the possible different Nash equilibria outcomes are fairly large leading to a situation which may be hard both to model and predict for regulatory authorities. Finally, in certain situations, subsidizing boat transportation may not lead to increased use of boat as transport modal choice. In final sections of the paper, the case of demand uncertainty is examined. The basic findings here, is that unique Nash equilibria where both agents choose car emerge as a consequence of added uncertainty.Received: March 2003 / Accepted: August 2003     

North–South transfers vs biodiversity conservation: a trade differential game

Trade relationships connect developed and developing countries. The former produces a consumption good, using labor, capital, and an intermediate “natural” good which is produced in the developing countries using labor and natural species. A finite horizon differential game is settled out. The North decides about either the saving rate or the portion of its disposable income to transfer to the South or both variables jointly. The South selects the range of species used in the production of the intermediate “natural” good required in the North’s productive process. This is a measure of biodiversity loss. The aim of the paper is to study how transfers from North to South affect capital growth and biodiversity conservation.

Evolutionary game of investors’ opportunistic behaviour during the operational period in PPP projects

In public–private partnership (PPP) projects, during the operational period, private investors are prone to act opportunistically in pursuit of their own gain. Based on the perspectives of government’s administrative supervisory functions, this paper analyses the issue of strategic choice for opportunistic behaviour by the government and private investors during the operational period of projects using evolutionary game theory. The results show that there is not a single set of evolutionarily stable strategies (ESS) between the government and the investors. The end results of the evolutionary game are related to the initial states of the system. Conditions that would dissuade investors from adopting an opportunistic behaviour, and settings that would encourage government to supervise closely, are explored. Punishments set by the government, which would then lead to different ultimate choices made by these two parties, are also discussed. Finally, the paper proposes a few policy recommendations for government supervision on the basis of parametric analysis. The findings also serve as a reference for the decision-making process of the government and the investors.