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Strategic Interdependence: Quasi-Experiment in the Maritime Industry during the 1880s in Japan

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  • Yokoyama, Kazuki

Abstract

Without a sufficiently informative dataset, it would be difficult to explore strategic interdependencies among firms, such as demand estimation. This paper investigates strategic interdependence through a unique historical case of duopoly in the Japanese maritime industry during the 1880s. Yubin Kisen Mitsubishi, led by Iwasaki Yataro, was a monopoly. A new entrant, Kyodo Un'yu, led by Shibusawa Eiichi, offered superior services and implemented a strategy of one-sided fare reductions. Yubin Kisen Mitsubishi delayed in taking countermeasures. This paper regards this delay as a quasi-experiment, and reveals the process by which Kyodo Un'yu gained market share. A simple elasticity calculation shows that a 1% price cut by Kyodo Un'yu resulted in a 10.065% increase in cargo transport demand.

Suggested Citation

  • Yokoyama, Kazuki, 2024. "Strategic Interdependence: Quasi-Experiment in the Maritime Industry during the 1880s in Japan," MPRA Paper 121730, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:121730
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    More about this item

    Keywords

    Strategic Interdependence; Duopoly; Price Reduction; Elasticity; Maritime Industry; Shibusawa Eiichi; Iwasaki Yataro;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • N75 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - Asia including Middle East
    • N85 - Economic History - - Micro-Business History - - - Asia including Middle East
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise

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