ABSTRACT
A similar expression holds for µ2. We apply comparative static analysis on (25) with respect to the port capacities. The effects of port capacities are shown in (26) and (27).
¼ � 2aN f g1 þ g2ð Þ þ g1g2Nð Þ 3g2K21
< 0 (26)
¼ � 4ag2N f g1 þ g2ð Þ þ g1g2Nð Þ 3g21K
< 0 (27)
Properties (26) and (27) show the similar results obtained from the numerical experiments, where the equilibrium port price decreases with the port capacities of own and competitor. Explaining from a long-term strategic perspective, port expansion in either port will decrease the equilibrium port prices.
