Price and frequency competition in freight transportation

摘要: This paper develops a simple analytical model of price and frequency competition among freight carriers. In the model, full faced by shipper (a goods producer) includes actual shipping plus an inventory holding cost, which is inversely proportional to shipments offered carrier. Taking brand loyalty on part shippers into account, competing carriers maximize profit setting prices, frequencies vehicle carrying capacities. Assuming tractable functional forms, long- short-run comparative-static results are derived show how choice variables affected model’s parameters. The also provides efficiency analysis, comparing equilibrium social optimum, it attempts explain phenomenon excess capacity in industry.