https://macropaperwarehouse.com/authors/gene-m-grossman/Gene M GrossmanHugo -- gohugo.ioen-ushttps://macropaperwarehouse.com/papers/optimal-resilience-in-multitier-supply-chains/https://macropaperwarehouse.com/papers/optimal-resilience-in-multitier-supply-chains/<p><strong>Research Question</strong></p> <p>Grossman, Helpman, and Sabal ask what market failures arise in vertical supply chains with multiple production tiers, limited (non-anonymous) supply networks, arms-length transactions, and recurrent risks of disruption at every node. They then ask what government policies would be required to implement the socially efficient (first-best) allocation as a decentralized equilibrium, and — in a second-best environment where subsidies to firm-to-firm transactions are politically infeasible — how optimal policies to promote resilience and network formation differ.</p>