Lu Xu

Cybersecurity presents non-negligible challenges for firm collaboration and supply chain viability, as information exchange among nodes introduces potential interdependent risks. How to make appropriate decisions on security investments and information exchange modes is a significant issue for supply chain members. Considering two information exchange modes: system interconnection and system independence, this study develops two game models to investigate the cybersecurity investments in a vertical supply chain composed of a retailer and n suppliers. Initial analysis shows that although firms learn investment decisions mutually in the face of a changing cybersecurity environment, suppliers always take a free ride on the efforts of retailer in two cases and the increased interdependent risks will damp nodes enthusiasm for security investments. Next, to compare the two cases, we introduce information exchange efficiency as the mediate parameter to link degree of system interconnection and proportion of information shared. We found that under the system independence mode, firms with high information-exchanging demand in the large-scale supply chain are more motivated to invest in cybersecurity. Furthermore, we extend our models to a centralised decision-making scenario. We find that security investment efficiency is greatly improved, and the free-riding behaviour of supplier is significantly reduced when systems are interconnected.

Considering information security and personalization paradoxes, this paper investigates the optimal information security investments of a firm and purchasing decisions of consumers with different privacy concerns in online personalization. It is found that consumers and firm tend to fall into a prisoner's dilemma in Nash equilibrium. To improve security investment efficiency and boost personalization consumption, firm‐led Stackelberg game and firm‐led Stackelberg game with punishment mechanism are proposed and analyzed. The results indicate that the security information measures firm take in advance can effectively increase the waverers' willingness to purchase personalized products. Government punishment helps to facilitate a win‐win situation but does not work when proportion of wavers in the market is very small. Furthermore, the responses of equilibrium strategies and payoffs to related characteristics are discussed numerically. Finally, some managerial insights are recommended to firms who provide personalized products for making proper security investment and to government departments for formulating security punishment policies.

This paper studies a container slot allocation problem with dynamic pricing for time-sensitive cargo considering port congestion. Time-sensitive cargo calls for express delivery as soon as possible, and hence a new pricing pattern is proposed considering port congestion. To solve the slot allocation with dynamic pricing issue, a one-phase allocation model which is from different points of view on slot allocation strategy is proposed to formulate this problem. Finally, numerical examples are carried out to test the applicability of the proposed model and solution algorithm.

Cybersecurity presents a monumental challenge for interconnected supply chains, as an attack on one node can compromise an entire business. In this paper, we propose a game theory model to investigate cybersecurity investments with third-party risk propagation in a two-echelon supply chain consisting of one retailer and n suppliers. The optimal investments and their responses to relevant security characteristics, such as intrinsic vulnerability, propagation probability, number of suppliers, and attack probability, are analysed and discussed both theoretically and numerically considering one-stage risk propagation. It is found that there are serious prisoners' dilemma and free-riding phenomena in such a scenario. To mitigate third-party risks and improve the investment efficiency, three coordination mechanisms, joint decision, security risk compensation, and security information sharing, are presented and compared numerically. The results indicate that joint decision-making and security risk compensation perform better on stimulating firms' investments and reducing expected costs both individually and collectively relative to security information sharing. Furthermore, the case of two-stage risk propagation is also supplemented and compared with one-stage case. Based on these findings, some management insights are recommended to cybersecurity managers in supply chains for designing more efficient cybersecurity mechanisms and investment strategies.