Supply chain risk propagation model considering the herd mentality mechanism and risk preference

Huo, Liang’an, Hongyuan Guo and Yingying Cheng

Physica A: Statistical Mechanics and its Applications, 2019, vol. 529, issue C

Abstract: With the intensification of competition among enterprises increasing and the improvement of the complexity of supply chain, the outbreak of supply chain risk has brought a great impact on the enterprise. Research on supply chain risk propagation can not only effectively improve the development of the enterprise, but also guarantee the whole supply chain operate stably Taking into account the different attitudes to enterprises at risk and the herd mechanism between enterprises, a new model is established, which focuses on research on the risk propagation mechanism of the supply chain of risk-seeking enterprises and risk-averse enterprises. Based on the mean-field theory, the threshold of supply chain risk and the scale of risk propagation can be obtained by numerical simulation which reveals that the degree of herd mechanism and risk preference will affect the propagation of supply chain risk. Therefore, the model can provide a good explanation of the risk preference and the influence of the herd mechanism on the supply chain risk, and further verify the feasibility of the model in the supply chain risks propagation problem.

Keywords: Supply chain risk; Risk propagation; Herd mechanism; Risk preference (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:phsmap:v:529:y:2019:i:c:s0378437119308209

DOI: 10.1016/j.physa.2019.121400

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