Black swans and supply chain strategic necessity

摘要

Global supply chains have grown greatly in recent years. Terrorist events that disrupt such supply chains have been and are likely to take place occasionally, but are very hard to assess. Given that such disruptions have potentials for creating enormous economic losses, this paper presents a much-needed approach to assessing and mitigating terrorism related supply chain disruptions. Because of the tragedy of the commons and related market failures, industry association and/or government action is necessary especially for low probability but high impact events.