Managing Cascading Disruptions Through Optimal Liability Assignment
研究供应链中企业如何通过责任分配来激励预防投资，以减少级联失败的影响，发现间接责任对避免无效率至关重要。
Interconnected agents such as firms in a supply chain make simultaneous preparatory investments to increase chances of honoring their respective bilateral agreements. Failures cascade with lasting repercussions further down the chain. How losses are shared affects how agents invest to avoid the losses in the first place. In this way, a solution sets agent liabilities depending on the point of disruption and induces a supermodular investment game. We characterize all efficient solutions. These have the form that later agents—who are not directly liable for the disruption—still shoulder some of the losses, justified on the premise that they might have failed anyway. Importantly, we find that such indirect liabilities are necessary to avoid unbounded inefficiencies. Finally, we pinpoint one efficient solution with several desirable properties. This paper was accepted by Peng Sun, optimization and decision analytics. Funding: This work was supported by the Danmarks Frie Forskningsfond [Grant 4260-00050B] and Carlsbergfondet [Grant CF18-1112].