ABSTRACT
In a recent article [3] I examined the conditions for international-transportation equilibrium under the alternative market structures of monopoly (the conference system) and monopolistic competition (a breakdown of the conference). The model involved the assumptions of constant costs of production, linear downward-sloping commodity demand functions, pure competition in commodity markets, two countries represented by discrete spatial points (A and B), constant per-unit commodity costs of transportation (costs allocable to particular cargo for carriage in a given direction – either A to B or B to A), a unique ship type with given vessel and overhead expenses (joint costs of a round-trip A–B voyage), and identical cargo contents of all vessels on the route. In the present article I explore the implications of the model for the analysis of freight-rate discrimination in oceanic transportation.
