A game theoretic decision model for organic food supplier evaluation in the global supply chains. (1st January 2020) - Lau, Henry
Abstract: Sourcing organic food products from global green supply chains (GGSCs) spreads across country borders and interacting among a wide spectrum of intermediary stakeholders, which adds complexity and incentivises profit-seeking stakeholders to engage in food adulteration. This phenomenon is frequently observed among green and organic products with credence attributes that are difficult to authenticate in both the prior- and post-purchase stages in both developed and developing countries. The case study that we investigate is a small-sized supermarket chain operator in Hong Kong, with an increasingly expanding range of organic food products. Whilst there is a proven set of hybrid multi-criterion decision making (MCDM) methods and model that have been implemented successfully in Australia, unfortunately, unable to assure total success in optimizing the selection of organic food suppliers when applying to this supermarket chain in Hong Kong. Even the obvious solution of certification and product labeling is not sufficient to solve this organic food credibility problem. Our study proposes a newly discovered criterion as postulated by the game theoretic framework, offering a more optimal and authentic solution to the organic food authentication problem. Apart from adopting the mixed strategy of random monitoring, fines should be imposed to penalise dishonest suppliers, instead of awarding bonuses to suppliers operating with integrity. An even better solution is to institutionalise these control mechanisms by the governing authorities with continuous monitoring and imposition of penalties.