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This paper examines a regional port system with two container terminals where terminal operators compete in service price and service quality. We study impacts of the information and the support provided by governments on the terminal operators’ decisions by proposing a two-stage game model to characterize this regional container terminal competition relationship. Through theoretical analysis, we derive the equilibrium solutions of the two terminal operators under different cases. We then compare these cases and conduct sensitivity analysis. It is found that: (1) the terminal operators can increase their incomes by adopting government support regardless of the strategy selected by the competing terminal; (2) a terminal operator is more willing to adopt the government support if its competitor does not adopt any support from the government; (3) the port government information is not always utilized by terminal operators unless the accuracy of information is sufficiently high.

Managing regional container terminal competition: the roles of information and government support