Search Frictions and Efficiency in Decentralized Transportation Markets

Brancaccio, Giulia; Kalouptsidi, Myrto; Papageorgiou, Theodore; Rosaia, Nicola

doi:10.2139/ssrn.3621805

Cited by 4 publications

(3 citation statements)

References 57 publications

(52 reference statements)

Supporting

Mentioning

Contrasting

Order By: Relevance

“…The heterogeneous nature of ships and freight services increases search friction, leading to the involvement of physical brokers in matching buyers and sellers, similar to the stock trade in the past (Brancaccio et al, 2020). In the case of a freight market, the charterer contacts the ship operator through a freight broker, while in the sales and purchase (S&P) market, sellers reach out to S&P brokers to find potential buyers.…”

Section: Bargaining and Transaction Prices In Shippingmentioning

confidence: 99%

Review of bargaining and transaction prices: future avenues for shipping studies

Sahoo,

Jiang,

Song

2023

MABR

View full text Add to dashboard Cite

PurposeIn the shipping industry, both sales and purchases of second-hand ships and freight transport services are prevalently tailor-made and traded with intense bilateral negotiations. Price bargaining is the key step of this negotiation process and plays a crucial role in determining mutually agreed prices. Despite its cruciality and applicability, the price bargaining has yet received due conceptual and/or theoretical attention in the shipping literature. This paper attempts to conceptually examine the role of bargaining in shipping transaction prices and subsequently puts forward directions for future research. In doing so, the paper focuses on two types of transactions taking place in shipping markets: asset market trading of second-hand vessels and service market trading shipping freights.Design/methodology/approachThe paper begins with a systematic literature review of price bargaining in the field of economics and management disciplines from a game-theoretic perspective. This approach does logically lead to the establishment of a conceptual framework for price bargaining in shipping sub-markets as a step toward having taken into consideration a variety of heterogeneities commonly present in trading activities and market dynamics.FindingsA set of research areas has been consequently identified where price bargaining and mechanisms for the shipping freight and asset markets could be further explored and analyzed in a way to make better pricing decisions under a more tangible framework.Research limitations/implicationsOne of the critical challenges when using bargaining mechanisms to make a decision on pricing shipping services and assets is how to operationalize the study for empirical investigation as some of the factors are internal information of the players and are not adequately revealed to externals: that is, an imperfect information sharing case. The current study aims, however, not to conduct an empirical analysis but to initiate a conversation among maritime economists by bringing their attention to this not-yet fully explored and potentially impactful field of research and by asking them to treat bargaining from a perspective for pricing shipping assets and services. It is claimed that, by doing so, one could better understand price differences between individual contracts.Originality/valueThis study would be considered the first in its kind to provide a detailed survey of the bargaining theory and models from a game theoretical perspective as a theoretical lens to understand its importance and relevance in pricing shipping assets and services. It also provides a simplified operational case on utilizing bargaining in practically pricing freight services.

show abstract

Section: Bargaining and Transaction Prices In Shippingmentioning

confidence: 99%

Review of bargaining and transaction prices: future avenues for shipping studies

Sahoo,

Jiang,

Song

2023

MABR

View full text Add to dashboard Cite

show abstract

“…Our empirical application using US data from 2001 through 2017 finds that aggregate search effort has 6 Hosios (1990) focuses on markets with homogeneous agents. However the same condition is necessary (but not sufficient) in the case of (one-sided) heterogeneity (see Brancaccio et al, 2020b).…”

Section: Introductionmentioning

confidence: 99%

Beyond Cobb-Douglas: Flexibly Estimating Matching Functions with Unobserved Matching Efficiency

Lange

Papageorgiou

2020

SSRN Journal

Self Cite

View full text Add to dashboard Cite

Exploiting results from the literature on non-parametric identification, we make three methodological contributions to the empirical literature estimating the matching function, commonly used to map unemployment and vacancies into hires. First, we show how to non-parametrically identify the matching function. Second, we estimate the matching function allowing for unobserved matching efficacy, without imposing the usual independence assumption between matching efficiency and search on either side of the labor market. Third, we allow for multiple types of jobseekers and consider an "augmented" Beveridge curve that includes them. Our estimated elasticity of hires with respect to vacancies is procyclical and varies between 0.15 and 0.3. This is substantially lower than common estimates suggesting that a significant bias stems from the commonly-used independence assumption. Moreover, variation in match efficiency accounts for much of the decline in hires during the Great Recession.

show abstract

“… In a similar vein, Liu et al (2019) and Hall et al (2019) study various aspects of the design of DiDi and Uber, respectively. These papers, however, do not estimate demand.5 Brancaccio et al (2017) andBrancaccio et al (2020) study closely related models in the context of the oceanic bulk shipping industry.…”

mentioning

confidence: 99%