Three Essays on Contagion Risk in Supply Chain

Firms often benefit when an unfavourable event befalls a rival, usually through a shift in demand. But sometimes negative events can adversely affect other firms in the industry, a phenomena referred to as contagion. While contagion can harm the supply chain by disrupting supply or demand, or increasing operating costs, it has not yet been studied in the area of supply chain risk management. Aiming to fill this gap, in the first essay I use real cases to conceptualize the process of contagion and apply related theories and literature to theorize the key factors contributing to contagion risk. The second essay examines the contagion effect of small to moderate events as opposed to extreme events, such as an explosion in a nuclear power plant, where contagion is clearly evident and documented. Finally, the third essay explores the conditions under which low-risk firms may benefit from investing in safety improvements for their higher-risk rivals. My dissertation contributes to the literature by recognizing the role of rivals’ safety in supply chain risk management

Quality disclosure strategy with asymmetric demand information in food supply chains

The effects of food product quality disclosure on enhancing food quality transparency have drawn wide attention to food supply chain management. However, demand information asymmetry in the vertical direction of food supply chains hinders the supplier's quality disclosure due to the fact that the supplier is uncertain whether the profits brought by quality disclosure can offset the disclosure costs. To overcome this challenge, this paper analyzes the information interaction in food supply chains including one leading supplier who provides consumers food with uncertain quality information and two following retailers who own demand information privately; the supplier provides preservation service for the food to stimulate the demand and makes the quality disclosure decision based on the profit trade-off between disclosure and not disclosure. Our research shows that cost-effective preservation service can stimulate two retailers to share information. To avoid high information leakage, two retailers will face the prisoner's dilemma when they achieve the final equilibrium under certain conditions. If the supplier discloses information about food with high quality, it will deepen the information leakage. Higher preservation service efficiency can avoid the retailers’ prisoner's dilemma, whereas information disclosure of high-quality products may make the prisoner's dilemma worse. The numerical example shows that more accurate information signals and more intense competition urge the supplier to disclose quality information. A subsidy mechanism is designed for the supplier to motivate the retailers to provide information, which enables supply chain members to gain more profits