ORIGINAL RESEARCH article
Front. Mar. Sci.
Sec. Marine Affairs and Policy
This article is part of the Research TopicSmartization and Resilience of Ports and ShippingView all 9 articles
Optimisation of Decision-Making and Risk Management Strategies in Second-Hand Ship Transactions Considering Information Asymmetry
Provisionally accepted
- 1Shanghai Maritime University, pudong, China
- 2Hefei University of Technology, Hefei, China
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The global shipping industry serves as a pillar of international trade, with the second-hand vessel market functioning as a crucial platform for capital allocation and risk redistribution within the sector. Its operational efficiency is significantly hampered by issues of information asymmetry. Unlike standardised newbuilds, each second-hand vessel constitutes a unique asset whose true value hinges on "hidden attributes" such as maintenance history and accident records that remain partially inaccessible to buyers. This alignment with the characteristics of a "lemons market" theory readily induces adverse selection and diminishes market efficiency. Against this backdrop, this paper constructs an incomplete information static Bayesian game model, abstracting the transaction as a two-stage sequential game where the seller quotes first and the buyer decides subsequently. The aim is to reveal how sellers with information advantages formulate optimal quoting strategies across different vessel types and cost structures, and how buyers at an informational disadvantage develop acceptance/rejection decision rules based on posterior beliefs. Numerical methods (Newton-Raphson iteration) were employed to solve the model equilibrium, calculating equilibrium quotations, transaction probabilities, and seller expected residuals for ten major container vessel types. Benchmark results indicate that sellers can extract information rents through their informational advantage, with rent magnitude increasing alongside vessel size. Comparative channel analysis further reveals that, compared to newbuild and charter markets, the second-hand vessel market exhibits higher transaction probabilities and premium levels due to greater information asymmetry. Robustness tests (incorporating buyer risk aversion, discrete type spaces, and reservation prices) confirm the model's core findings remain stable. This research provides a theoretical framework and quantitative basis for understanding the micro-mechanisms of shipping asset transactions under information asymmetry. It offers insights for market participants' pricing decisions and regulators designing mechanisms to enhance market transparency.
Keywords: Bayesian game, Equilibrium analysis, information asymmetry, Second-hand ship market, signalling
Received: 02 Nov 2025; Accepted: 02 Dec 2025.
Copyright: © 2025 Dong, Zeng, Sun and Liu. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY). The use, distribution or reproduction in other forums is permitted, provided the original author(s) or licensor are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.
* Correspondence: Ling Sun
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