Container Liner Shipping Strategic Alliances Game

Confronted with fierce competition for markets, strategic alliances have recently been formed' in succession among container lines'. Through sharing ships and docks, lines' have succeeded in raising utilization ration of equipments, reducing investment in equipment of container transportation, so that the risks of investment and management have been reduced, and large-scaled economic returns have been acquired. Meanwhile, through expanding the extent of shipping services covering, intensifying the frequency of services, lines provide better service for shipper and strengthen their own competitive power. Lines alliance is permeated with competition and cooperation from beginning to end, which impels alliance's group to realign. Therefore, alliance's group is unstable. The distribution of value through cooperation may not only affect working efficiency, but also directly influence the existence of the alliance. With regard to the distribution of profits, traditional economics put less emphasis and also focused on the effective distribution of resources and price system. At the same time, the analysis of enterprise was confined to the contrast between cost and profit of rational humans subjected to price system.Game theory studies the decision and its equilibrium. According to whether the binding agreement is achieved, the theory can be divided into co-operative game theory and non-co-operative game theory. Practices have proved that game theory has become an effective tool of analyzing and solving competitive and co-operative problems.This paper aims to explain the rationality of strategic alliance with the help of game theory, discuss how to distribute the profit of lines' alliance among the members and provide theoretic basis for strategic alliance practice. There is always some discrepancy between the profit got from the alliance and the expected profit, so many members may think what they get from the alliance does not tally with what they have done for the alliance, which makes them doubt the effectiveness and1even choose to withdraw from the alliance. This paper intends to make use of game theory to analyze problems so as to make the members of the alliance have a more reasonable expectation for the distribution of profits and therefore reduce the instability of the alliance.This paper expounds the past and current situations -of lines' cooperation and alliance, and gives a general explanation of game theory and relevant economic principles. For example, this paper explains the reasonability of strategic alliance by using non-co-operative game theory, i.e. Cournot duopoly model. In the end, this paper analyzes the instability of the alliance and proposes methods to take strict precautions.Zhang Yankui(Communication & transportationplanning & management) Directed by professor & Dr. Zhao Gang...