A game theory model for freight service provision security investments for high-value cargo

摘要

In this paper, we develop a game theory model in which freight service providers seek to maximize their expected utility by competing for business from shippers and also investing in security. The focus is on high-value cargo, which has been the target of attacks globally. Shippers reflect their preferences for freight service providers through the prices they are willing to pay which depend on quantities shipped and security levels invested in. The Nash Equilibrium is formulated as a variational inequality problem for which existence is guaranteed. Numerical examples illustrate the framework and give essential freight security investment policy related information.