TY  - CHAP
AB  - Abstract The relationship between airline and airport is complex, fascinating, and wide open for new research endeavors. In Volume 6 of the series, we conducted the analyses of risk-sharing contract between airline and airport from numerical risk balance assessment and incomplete contract theory perspectives based on an interesting real example of risk-sharing contracts, the Noto Airport Load Factor Guarantee Mechanism (LFGM) contract in Japan.In this chapter, we further advance the analyses of risk-sharing contracts, based on the real example of Noto LFGM contract, from the perspectives of game theory and principal-agent theory. The risk-sharing arrangements, such as LFGM contract, are relevant to the rapidly changing business environment in Asia’s aviation industries.We conduct a two-stage game analysis. The first phase is the contract negotiation phase and the second phase is the effort-making phase after signing the contract. We show that the two parties can attain a Pareto optimal utility level by bargaining a simple linear risk-sharing contract in the contract negotiation phase based on the equilibrium effort levels in the effort-making phase.
VL  - 7
SN  - 978-1-78754-566-3, 978-1-78754-565-6/2212-1609
DO  - 10.1108/S2212-160920180000007014
UR  - https://doi.org/10.1108/S2212-160920180000007014
AU  - Hihara Katsuya
AU  - Makimoto Naoki
PY  - 2018
Y1  - 2018/01/01
TI  - Analyses of Risk-sharing Contract of Airport and Airline Vertical Relationship: Bargaining and Agency Analyses
T2  - Airline Economics in Asia
T3  - Advances in Airline Economics
PB  - Emerald Publishing Limited
SP  - 267
EP  - 286
Y2  - 2024/09/18
ER  -