Strategic Interplay Between Ports, Sustainability and Spatial Competition: A Game Theoretic Approach

Abstract

Abstract Ports are vital hubs balancing economic growth and sustainable development imperatives. This paper investigates the strategic competition between two Iranian ports pursuing multimodal and exclusive road freight transportation using sequential spatial game theory. Simulating three scenarios focused on distinct sustainability goals, the model analyzes pricing, subsidies and taxation impacts on ports’ profitability, market dynamics and advancement of sustainable policies. The multimodal port exhibits greater profitability and market dominance across all scenarios, underscoring its viability for supporting Iran’s sustainable growth. While subsidies and discounts promote environmentally friendly multimodal transport, taxation proves less effective for emissions mitigation, indicating a policy pivot is essential. The framework reveals how economic levers and government interventions could potentially optimize environmental performance, social welfare, and job creation in the port sector. By providing a novel sustainability perspective on spatial port competition, these findings offer valuable insights to guide policymaking and management globally. The model's strategic outlook allows evaluating outcomes of decisions and infrastructure interventions for sustainable freight transportation worldwide.