Research on sea-cargo contract coordination under reference effect of forwarder´s downstream customers

Forwarder´s downstream customers basically procure shipping space from forwarders, and always make expectations about spot price, and then make ordering decisions based on comparison between expectation and contract price. This paper introduces the price reference effect of forwarder´s customers into cargo contract coordination, and analyzes the capacity allocation and pricing coordination between carrier and forwarder when the customers have price reference effect. And then we analyze the situation where the reference effect is asymmetrical. Because of the asymmetrical reference effect, forwarder exploits opportunism to get dual profits from lower contract price and higher ordering quantity; and under specific conditions, the reference effect also can make carrier get more welfare. Finally, we analyze ordering price and profit difference between symmetrical reference and asymmetrical reference.