Cooperation strategies for competing ports considering risk Linkages

Abstract

Port cooperation significantly enhances the competitiveness of the region where a port operates, thereby attracting increased cargo demand. However, close operational collaboration also heightens the risk of inter-port transmission during disasters, escalating their vulnerability. In this paper, we develop a risk transmission game model to investigate the impact of regional port co-operation (competition and cooperation) on disaster prevention investments and identify the optimal cooperation strategy that holds paramount practical significance. We uncover a counter-intuitive finding suggesting that, in a competitive environment, close cooperation between ports may adversely affect the resilience and profit of ports. Through a synthesis of consumer surplus and social welfare analyses, we observe that when the positive effect of cooperation between the ports is large, public integration is a four-win strategy, optimizing disaster prevention investment, port profits, consumer surplus, and social welfare. Moreover, we show that intense competition between ports is always detrimental to port resilience, port profits, consumer interests, and societal interests.