Learning and investment under demand uncertainty in container shipping.
This article investigates the role of demand uncertainty in explaining cyclical investment fluctuations in the container shipping industry. I develop and estimate a dynamic oligopoly model with learning in which firms choose investment and scrapping. In this model, firms are uncertain about the true...
| Published in: | RAND Journal of Economics (Wiley-Blackwell) Vol. 53; no. 1; pp. 226 - 260 |
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| Format: | Article |
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Wiley-Blackwell
Mar2022
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| Online Access: | View this record in EBSCOhost |
| fields | @attributes: recordID: 1 pdfLink: plink: https://search.ebscohost.com/login.aspx?direct=true&db=ssf&AN=155782250&site=ehost-live header: @attributes: shortDbName: ssf uiTerm: 155782250 longDbName: Social Sciences Full Text (H.W. Wilson) uiTag: AN controlInfo: bkinfo: jinfo: jid: 07416261 56RJ jtl: RAND Journal of Economics (Wiley-Blackwell) issn: 07416261 maglogo: Y pubinfo: dt: Mar2022 vid: 53 iid: 1 pid: 480 pub: Wiley-Blackwell artinfo: ui: 155782250 10.1111/1756-2171.12406 ppf: 226 ppct: 34 formats: fmt: – @attributes: type: T – @attributes: type: C – @attributes: type: P size: 1.2MB tig: atl: Learning and investment under demand uncertainty in container shipping. aug: su: Shipping containers Container ships Maritime shipping Container industry Dynamic models sug: subj: Glass Container Manufacturing Deep sea, coastal and Great Lakes water transportation (except by ferries) Other Support Activities for Water Transportation Marine shipping agencies Navigational Services to Shipping Other Paperboard Container Manufacturing Industrial Supplies Merchant Wholesalers Shipping containers Container ships Maritime shipping Container industry Dynamic models ab: This article investigates the role of demand uncertainty in explaining cyclical investment fluctuations in the container shipping industry. I develop and estimate a dynamic oligopoly model with learning in which firms choose investment and scrapping. In this model, firms are uncertain about the true parameters in the underlying process for demand, and form and revise their beliefs using available information. Counterfactual analysis reveals that uncertainty about the demand process amplifies investment cycles through (i) leading firms to revise beliefs more drastically as they experience demand fluctuations, and (ii) intensifying strategic incentives among firms. pubtype: Academic Journal doctype: Article src: R language: English refInfo: copyright: @attributes: flag: N holdings: @attributes: islocal: N |
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