Consumer Panic Buying: Realizing Its Consequences and Repercussions on the Supply Chain

Rithika Dulam, Kazuo Furuta and Taro Kanno
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Rithika Dulam: Technology Management for Innovation, The University of Tokyo, Tokyo 113-8654, Japan
Kazuo Furuta: Technology Management for Innovation, The University of Tokyo, Tokyo 113-8654, Japan
Taro Kanno: Systems Innovation, The University of Tokyo, Tokyo 113-8654, Japan

Sustainability, 2021, vol. 13, issue 8, 1-24

Abstract: Globalization has brought not only advantages but also risks into the supply chains. One lesser studied risk is the effect of consumer behavior in crises. The recent COVID-19 pandemic has shown that the most efficient and optimized supply chains are susceptible to consumer panic buying. There is a severe need to understand the multitude of scenarios that could manifest after a catastrophe due to the change in consumer behavior so that businesses can develop a mitigation plan. The authors have developed an agent-based model that can simulate the various outcomes of a crisis using a consumer panic buying model and a supply chain model. The model quantitatively evaluates the panic purchase intention of a consumer while assessing the impact of panic buying on the supply chain. This paper introduces the implementation of the model, focusing on output analysis of the various situational settings in disaster aftermath. Preliminary study has revealed that implementing quota policy or rationing uniformly is very effective while controlling media reports or panic buying consumers can reduce consumer demand significantly.

Keywords: consumer behavior; panic buying; decision-making; agent-based model; disaster (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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