Problem definition: Random shocks happen frequently in global sourcing, leading to rising transportation costs and uncertain delays that induce demand loss. To navigate sourcing shocks, we observe that some firms strategically abandon goods to reduce supply, whereas others further adopt responsive pricing to better utilize supply. While responsive pricing has been extensively studied in the literature, strategic abandonment, and its interactions with responsive pricing, have received little attention in prior studies. Methodology/results: We develop a multi-stage game-theoretic model to investigate the effects of strategic abandonment on product demand, effective supply, and consumer surplus under global sourcing shocks, and characterize how these effects are further influenced by responsive pricing. By structuring our analysis into two regimes, without strategic abandonment and with strategic abandonment, we first reveal the value of strategic abandonment and outline its activation conditions: a high transportation cost escalation encourages strategic abandonment, while a high risk probability discourages it. We further show that adopting responsive pricing may undermine the value of strategic abandonment, implying that the two mechanisms may act as either complements or substitutes. Finally, we identify conditions under which strategic abandonment combined with responsive pricing can achieve a Pareto improvement for both supply chain members and consumer surplus. Managerial implications: Our analysis provides a better understanding of how strategic abandonment mitigates the impact of sourcing shocks and reminds global firm managers that using both strategic abandonment and responsive pricing blindly can be very detrimental. An effective sourcing risk mitigation mechanism must be carefully designed by evaluating the value of contingency strategies in the face of supply chain uncertainty.

Online products have long suffered from consumer distrust, putting them at a disadvantage when online brands compete with offline brands. To address this issue, many online brands have adopted blockchain as a means of quality endorsement to improve consumer trust. Alternatively, livestream e-commerce has shown the capability of both quality endorsement and demand creation by real-time interactions with consumers because the application of AR/VR technology and the use of online sales force can effectively induce the herding mentality. For many small and medium-sized online brands, it remains unclear which approach is better, so we formulate the key tradeoffs in the online brand's choice to improve consumer trust in the presence of offline brand's competition. Our research delves into the influence of three key factors on livestream e-commerce: the cost associated with adopting blockchain technology, the strength of positive network externality, and the potential downside of consumer returns. Contrary to conventional wisdom, we find that when the return cost is high and the network externality in livestream is weak, opting for livestream as a quality endorsement can actually benefit the online brand. We also find that the online brand is capable of mitigating the return cost by transferring it to consumers through charging a high retail price, which increases the likelihood of favoring livestream. Our findings shed light on the building and improvement of online consumer trust, contributing to the high-quality development of online-offline business in the new era of consumption.

In the cross-border e-commerce era, many multinational firms (MNFs) are operating local retailing divisions in emerging markets while also selling through e-tailers. Though e-tailers usually have a demand information advantage that can be known by the MNFs’ manufacturing divisions, interestingly, we note that due to a lack of cyber resilience, data transfer barriers between MNFs’ manufacturing and retailing divisions have widely inhibited intersectoral information transfer. Therefore, risk-averse retailing divisions may postpone orders to wait for the information, exposing them to a second-mover disadvantage. Intuitively, advanced intersectoral data transfer such as AI-enabled cybersecurity cloud platform is capable of facilitating the retailing division’s timely order based on demand information shared by the MNF, we observe that MNF’s tax-planning may be hampered under the Arm’s Length Principle, and tensions between horizontal (i.e., the e-tailer and the MNF’s retailing division) and vertical coordination may be exacerbated. Therefore, we study the MNF’s incentives to apply intersectoral data transfer based on a co-opetition game-theoretic model. We show that the retailing division’s preference varies with the tax disparity and its risk-averse degree. When tax disparity narrows, the sourcing cost-saving effect from postponed ordering allows the division to access demand information without incurring high costs. Establishing intersectoral data transfer is not always optimal for either the MNF or its retailing division. The MNF benefits when the tax disparity is high, whereas the retailing division should balance the information value against sourcing cost saving when deciding order timing.

In recent years, the accelerating breakthroughs in autonomous driving technology have catalyzed massive capital inflows into Robotaxi development, prompting ride-hailing service leading firms and emerging startups to commercialize Robotaxi service. However, considering the passengers’ attitude differences towards Robotaxi service and its co-opetition with traditional ride-hailing services, firms face complex strategic trade-offs when entering the Robotaxi market without giving up current ride-hailing services. In this paper, we develop a differentiated consumer utility model involving a traditional ride-hailing firm and a Robotaxi firm to examine the incentive for the traditional ride-hailing firm to also develop Robotaxi service, and we find that the effects of intra-firm competition and inter-firm competition lead to two counterintuitive results: (1) when passengers prefer human-driven service over Robotaxi service, the traditional ride-hailing firm surprisingly prefers to develop Robotaxi service; (2) when passengers exhibit preferences for Robotaxi service over human-driven service, the traditional ride-hailing firm is more likely to develop Robotaxi service only when the investment is less efficient, especially when the operational cost advantage of Robotaxi service is significant. Further, we find that the traditional ride-hailing firm’s Robotaxi development brings higher passenger surplus but may hurt the overall social welfare.

Amid escalating global production shocks, overseas sourcing is subject to increasing instability, much of which can be resolved after a shock-recovery period. Conventional wisdom suggests that buyers should postpone sourcing until overseas supply conditions stabilize; however, local substitutes may seize the opportunity to cannibalize market share. In this paper, we develop a two-stage competition model to examine the trade-offs in a global retailer's strategic decision between immediate sourcing under overseas supply uncertainty and sourcing postponement until overseas supply conditions stabilize, and evaluate their implications for overall supply chain resilience. Our findings underscore the critical roles of postponement-induced demand loss and the degree of local substitution. We show that the retailer's preference for sourcing postponement is non-monotonic in the local substitution parameter. As local substitution rises, the retailer may first move away from sourcing postponement but eventually revert to it. Likewise, the overseas supplier's preference exhibits a "P-I-P" pattern: stronger local substitution initially harms its postponement payoff but eventually restores it. From a resilience perspective, we identify a win-win outcome between total effective supply and the retailer's profit under the postponement strategy. These results suggest that strategic sourcing postponement is not inherently detrimental as a contingency strategy; rather, it can be advantageous when the retailer carefully evaluates the local substitution degree through a temporary sacrifice of market presence.

In practice, it is common for a brand to procure multiple components overseas and then assemble them into end products (even under recent threats of random shocks). Since most deliveries are conducted by maritime shipping companies and delivery delay is frequently confronted nowadays, shipment consolidation has been widely used to lower the probability of delivery delay, besides the benefit of delivery cost savings. In this paper, we investigate a multi-stakeholder system consisting of a local brand, one/two shipping companies, a global brand sourcing components overseas and two complementary component suppliers. We further develop supply chain resilience indexes to evaluate the cons and pros of the global brand's shipment consolidation strategy. We reveal that market competition plays a key role and the competition intensity has a non-monotonic effect on the global brand's production delay disadvantage and the cost-saving advantage under shipment consolidation strategy. Indeed, shipment consolidation enhances the global brand's supply chain resilience in most cases, but this strategy may be inefficient when the delivery delay probability is high. We further show that shipment consolidation can induce Pareto improvement situations for the stakeholders in the sense of supply chain resilience and profitability enhancement.

In light of the recent frequency of global emergencies that result in overseas delivery delays and cost surges, many multinational brands consider reshaping their sourcing configurations by incorporating local suppliers that may be of lower quality than globally selected counterparts. In this global context, pre-committed emergency renegotiation clauses have gained recognition as a common practice in international commercial contracts, which enable contractual parties to adjust key terms, such as the wholesale price and order quantity, during ex-post emergencies. This work aims to investigate how the presence of overseas emergency renegotiation affects the brand's strategy preference for dual versus single sourcing and the decision-making of supply chain parties. By comparing with two widely observed benchmark scenarios-contract termination and contract continuation at post-recovery cost-that exclude overseas emergency renegotiation, we show that in the presence of emergency renegotiation, the overseas supplier under both sourcing strategies may lower its wholesale price for the brand in response to a higher delay probability, which would not be the case in the contract termination benchmark. This price-cutting effect encourages the brand to order more from the overseas supplier, even if the delay probability is high. Furthermore, the brand favors dual sourcing if the overseas post-recovery unit cost is either low or high, driven by a distinct incentive under renegotiation: the local supplier may suppress the local rival by setting a high wholesale price, a scenario not possible in the contract continuation benchmark. Our study highlights the value of emergency contract renegotiation in reshaping resilient sourcing strategies for multinational brands facing global emergencies, even with ex-post local reorder or overseas quality deterioration during recovery.

The manufacturing sector is grappling with significant challenges, including concerns about worker well-being, sustainability, and the resilience of production systems. These core concerns drive the shift toward advanced manufacturing paradigm, where a suite of advanced technologies has been deployed to prioritize human-centric, sustainable, and resilient production practices. This paper develops a stylized competition model to investigate whether an inferior manufacturer suffering from unstable yield will strategically adopt relevant technologies to achieve zero-defect manufacturing. While zero-defect manufacturing intuitively promises better resilience, we find that its desirability becomes conditional if all three goals are taken into account. We introduce three performance indexes: worker well-being, environmental sustainability, and fulfillment resilience. One result worth noting is that zero-defect manufacturing does not always improve workers’ well-being, as it might increase workloads without proportional wage compensation. Regarding environmental sustainability, an interesting “green dilemma” is identified when the focal manufacturer has either a low or a high qualified yield level. Nevertheless, our analysis identifies feasible conditions under which the adoption of zero-defect manufacturing enables a multi-win situation for profitability, worker well-being, environmental sustainability, and fulfillment resilience.

Ports mainly collect revenue from hinterland and transshipment services. For ports that are newcomers to a specific service market, one natural question is: Would focusing on a single service be better than providing both services? In this study, based on tri-port competition analysis with two incumbents, we reveal interesting “2<1” zones in which providing two services (i.e., hinterland and transshipment services) yields lower profitability for the newcomer port than focusing on a single service (i.e., hinterland service only). We highlight the role of government subsidies in shaping the newcomer port’s incentive to provide two services, which may also benefit customer surplus. We also identify the conditions under which government subsidies either fail to promote port diversification or impose excessive fiscal burdens. To make matters worse, uncoordinated subsidies across local governments may generate the prisoner’s dilemma, where both governments incur high subsidy costs but achieve poorer performance than under the no-subsidy scenario. Therefore, our work shows the significance of coordinated regional governance within port systems, differentiated port service operations, and targeted government subsidies.

The shipping industry has increasingly faced transportation disruptions due to geopolitical tensions and regional shocks. In response, ocean shipping (OS) carriers have adopted resilience enhancement strategies to maintain service availability and operational continuity. While such strategies ensure carriers’ ability to sustain service provision during disruptions, they may also alter competitive dynamics within shipping alliances and weaken incentives for cooperation. This study develops an incentive-based model with two asymmetric OS carriers to examine the interplay among resilience enhancement, disruption risk, logistics service competition, and shipping alliance. We find that an inferior OS carrier’s resilience enhancement strategy may benefit (or surprisingly harm) itself when the shipping alliance’s dominant carrier cannot (can) effectively enhance the alliance service level to expand the market. Even though the inferior OS carrier’s resilience enhancement strategy may increase its own profitability, we reveal that the dominant carrier’s profitability can be impaired, hampering its incentive for alliance-based cooperation. Our work elucidates the role of resilient shipping service under an uncertain and co-opetitive environment.

Ocean shipping is cost-effective for long-distance freight but has significantly contributed to global carbon emissions. As such, how to balance sourcing cost and carbon emission reduction becomes a great challenge for international trade companies. We observe that some companies adopt shipment consolidation strategy, which is believed to be green but involves mandatory waiting time that causes delivery delays. We observe others source locally that reduce ocean shipping volume at a significantly higher sourcing cost, especially in developed markets such as the U.S. and Europe. In this study, to formulate the key trade-offs and derive the equilibrium freight shipping strategies, we investigate a three-tier supply chain model consisting of overseas/ local suppliers, one ocean shipping service provider, and one retailer that buys and resells goods to developed market consumers. We find that the shipping service provider will raise prices under shipment consolidation, while cutting prices under local sourcing strategy: Totally opposite pricing behaviors. We further find that the retailer's strategy preference reverses twice as the negative impact of delivery delay intensifies: Initially favoring shipment consolidation, then switching to local sourcing, and finally back to shipment consolidation. We reveal that it is local sourcing strategy rather than shipment consolidation that can achieve win-win situations in some sense of higher retailer profits and lower emissions.

Nowadays, many multinational firms (MNFs) still stick to overseas manufacturing for the benefits of low production costs and tax planning opportunities. However, such a strategy comes along with production shocks caused by power outages, fires, strikes, and so on. In this article, we use a Resilience Triangle framework to measure the risk of production shocks during the shock and recovery time. We explore two risk management strategies for MNFs: enhancing overseas manufacturing resilience via advanced technologies and reshoring to local manufacturing. We outline the MNF's trade-offs among overseas resilience loss, production cost, tax planning opportunity, and local manufacturing subsidy. We quantify the production-and-delivery delays caused by overseas manufacturing shocks and highlight the value of advanced production technologies in mitigating shocks and accelerating recovery. We find that the MNF's production strategy may switch from overseas manufacturing to local manufacturing and then back to overseas manufacturing when the local manufacturing subsidy is not too high and the local manufacturing cost is moderate. We show that overseas manufacturing with advanced production technologies can achieve a win-win situation regarding the MNF's resilience performance and profitability, as they enable the MNF to better balance production risks and financial gains.

Livestream e-commerce has made influencers pivotal to consumer engagement, yet influencer accidents can erode consumer trust and undermine channel performance for the collaborating brand. This paper studies how a brand can mitigate such risks by choosing between single- and multiple-influencer collaborations. We develop a hybrid-channel co-opetition model that embeds livestream accident risk and endogenous demand reallocation across channels, and use it to characterize equilibrium decisions and identify when different cooperation strategies dominate. Collaborating with more influencers can improve efficiency by reducing double marginalization, expanding demand, and softening downstream competition. However, it may also intensify intra-influencer rivalry and amplify profit losses when accident-induced demand loss becomes severe. Although influencers collectively gain reach and redundancy, higher sales do not necessarily raise their profits because internal competition compresses margins and coordination costs increase. Consumer surplus rises with higher commission rates but falls as accident risk intensifies, with the decline more pronounced under dual-influencer structures. To evaluate resilience, we propose a risk-loss index measuring the brand's profit reduction under accidents. A dual-influencer strategy improves resilience when market expansion is limited or accident risk is weak, but this advantage disappears as accident-induced demand loss intensifies. We further confirm the robustness of the main findings by extending the model to incorporate influencer information dissemination and endogenous commission rates. Our findings clarify the trade-offs among profitability, consumer surplus, and resilience in influencer collaboration design.

Maritime transport is crucial for global trade but contributes significantly to carbon emissions. In practice, shipment consolidation is proven to be an effective way to integrate demand and hence, reduce emissions. Recently, we have observed that Artificial Intelligence (AI)-based consolidation systems have been widely built to automate workflows and optimize cargo planning. However, they actually incur more emissions and energy waste in model training and infrastructure. This study therefore develops a game-theoretic model to analyze how to break such a dilemma. Our analysis reveals an interesting “efficiency improvement dilemma” that although AI-based consolidation system can significantly reduce consolidation waiting time, it lowers the retailer’s incentive to order more, which in turn hurts the shipping company’s profit. We further show that carbon emissions from AI usage may outweigh its environmental benefits. But under moderate competition intensity and manageable AI emissions, AI system can achieve Pareto improvement of profitability and environmental sustainability.

Consumers increasingly rebel against preference norms to signal individuality. Yet firms facing such rebellion sometimes differentiate their designs whereas sometimes converge to similar designs. How such rebellion shapes product design and differentiation is not well understood, especially when firms are uncertain about consumer preferences and the resulting norm. We develop a gametheoretic model in which two firms choose horizontal designs before preferences are realized and compete in prices afterward. We demonstrate that rebellion exerts a U-shaped impact on equilibrium differentiation. The pattern reflects two opposing effects. Rebellion directly rewards distinctiveness, encouraging differentiation. At the same time, rebellion erodes the consumer-population heterogeneity created by preference uncertainty. Under uncertainty, each firm serves a partially captive consumer segment, which softens competition. Rebellion undermines this captive demand by intensifying consumer switching and firm poaching, thereby inducing firms to offer less differentiated designs. When rebellion is mild, the heterogeneity-eroding effect dominates; when strong, the distinctivenessrewarding effect dominates. Prices and profits also exhibit U-shaped relationships with consumer rebellion; consumer surplus follows an inverted U-shape. Furthermore, compared with the no-rebellion benchmark, a differentiation trap arises: an intermediate level of rebellion leads to greater product differentiation, but lower firm profits and consumer surplus, in contrast to the classical wisdom that greater differentiation indicates higher profits.

Maritime transport is the major source of global carbon emissions. While logistics service providers have made substantial investments in decarbonization initiatives, their volatile shipping fees will significantly influence the demand volume, harming the consignor’s ability to jointly achieve profitability and environmental sustainability goals. Such risks can be further enhanced if consumers have reservations when they pay the bill for both goods and their green mindfulness. Therefore, in this study, we investigate whether the consignor’s self-operated fleets could mitigate the negative impacts of cost uncertainty and consumer green concern risks. Although it becomes the consignor who invests in carbon reduction, we reveal that the mitigated cost uncertainty and double marginalization effect help effectively hedge consumers’ payment hesitation when they have uncertain green mindfulness. We find that the consignor’s preference for building the self-operated fleet exhibits a non-monotonic pattern (shifting from self-operated fleet to logistics service providers and then back) as the initial carbon emission intensity increases. We identify an investment failure zone where aggressive carbon reduction via self-operated fleet suppresses sales quantity, thus reducing the consignor’s profitability. Regarding the system’s sustainability performance, we point out that more carbon reductions might boost demand, and hence, increase overall shipping volume and net emissions. These findings underscore the complexities in balancing logistics autonomy and environmental responsibility, offering useful insights for consignors’ developing overseas business.

Ports face growing demand volatility and congestion, threatening operational efficiency and environmental performance. AI-powered smart port technologies promise to mitigate these challenges by making congestion information visible to port users. However, this paper shows that such visibility does not always deliver the expected benefits when ports compete on both price and congestion situations. Providing more congestion information may paradoxically amplify demand fluctuations and worsen congestion, a phenomenon we term the “smart trap.” We further show that the value of developing smart port depends critically on port capacity levels and their demand correlation. When port capacity is tight and demand is moderately correlated, developing smart port can increase congestion and emissions. Our analysis cautions that digitalization does not universally improve port sustainability, and this finding is verified by an empirical study using Hamburg and Bremerhaven port data.

Leading brands such as Apple, Lenovo, Volkswagen, and BMW have increasingly enhanced their green performance by reducing carbon emissions. However, the most significant challenge is posed by their upstream supply chain partners, as there is generally a lack of incentive for suppliers to participate in downstream brands’ sustainability plans in addressing the Scope 3 problem. To address this challenge, this study examines two prevalent supply chain cooperation methods, i.e., (1) the vertical cooperation method via cost-sharing (denoted by Strategy S); and (2) the horizontal cooperation method via order pooling (denoted by Strategy P). That is, to incentivize suppliers to invest in carbon emission reductions, downstream brands can either share the reduction costs or consolidate their orders with a common supplier. The main findings include: (a) Given a high initial emission intensity, order pooling is more effective at carbon emission reductions. (b) While cost-sharing may reduce carbon emissions and improve social welfare, it is less likely to perform well in a cost-benefit analysis. By contrast, order pooling can achieve triple-win situations regarding carbon emission reductions, social welfare improvement, and cost-benefit efficiency enhancement. This study sheds light on the fact that for managers of leading brands, cooperating with competitors through order consolidation may be a more effective way to achieve green goals.

Consider a brand that competes with its contract manufacturer (CM) where the CM has self-brand business. Their products need the same key components (e.g., Dell and ASUS both use Intel Core processor for their laptops) but eventually have differentiated performances because the competitive CM usually have inferior product design capability. One natural question is whether it is beneficial to pool their component purchase orders for cost saving and if so, whether the component supplier's incentive to improve quality will be discouraged. We build a co-opetitive three-layer supply chain model by formulating the trade-offs among the component supplier's quality investment, the brand and the competitive CM's manufacturing cooperation, and their product competition in the downstream market. We find that when the CM's design capability disadvantage is either limited or significant, leading to intensified or mild product competition, component quality investment will be encouraged, but the joint procurement between the brand and the competitive CM will be discouraged. Recognizing the brand's advantageous demand potential, the supplier will strategically adjust the CM's wholesale price upward, whereas the brand's downward without the joint procurement of the brand and the competitive CM. Our study extends prior research on joint procurement by demonstrating how upstream suppliers can leverage both quality investment and wholesale pricing strategies to avoid potential profit loss from buyer procurement alliances.