The Performance of Seaport Clusters - RePub - Erasmus Universiteit ...

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Figure 15: Optimal investment quantity of a cluster manager
Level of
costs and
benefits
Positive
Benefits
of cluster
0
management
Costs of cluster
management
The Performance of Seaport Clusters
Benefits of cluster
management
Investment quantity
Optimum investment
level of cluster manager
Investment quantity
Port authorities have a certain minimum investment level, for instance for dredging and
maintenance. Up to a certain point, an increase in port charges combined with more
investments in the port cluster increases the performance of the port. After a certain
optimum level of investments, further tariff increases combined with more investments
reduce the performance of the port cluster. In the optimum investment level marginal costs
equal marginal benefits: the effect of an additional investment in the port cluster has the
same effect as a marginal reduction of port charges. Furthermore, the marginal benefits of a
‘reservation’ for future investments also equal marginal costs 80 . This background provides a
basis for analyzing the roles of port authorities in the three cases.
80 Finally, the marginal effects of the two different tariffs are the same as well: a reduction of land
prices has the same effect on the cluster performance as the reduction of port dues.