A game theory study for incentivizing multi-modal transportation in freight supply chain

Abstract

Along with the constant development of the manufacturing industry, logistics and transportation are now playing a crucial role in domestic and foreign economies. An approach to optimizing the transshipment process and saving associated costs, which is multi-modal transport, only accounts for a small proportion of Vietnam's current transportation system. The study outlines the definition of multi-modal transport and encourages transport companies to apply multimodal transport by setting up a Nash game of two upstream transportation and two downstream transportation companies when separated operating and integrated operating. The study also analyzed the description of firms in each sub-game. Nash equilibrium gives beneficial results when each upstream company decides to incorporate with each downstream company instead of intermodal processing. In this instance, the profitability also utility are maximized.