Study On The Supply Chain Network Equilibrium Considering The Information Security Investment Constraints

Uncertainties of the business environment reduce the ability of supply chain network to resist risks.Cyberattacks,as an important supply chain network disruption factor,can cause economic losses for node enterprises.Node enterprises increase their corresponding information security levels through information security investments to protect against cyberattacks.In the “Internet Plus” era,deepening research in this field is imminent.This paper uses variational inequalities,two-level mathematical programming and game theory considering the information security investment constraints to establish two different supply chain network equilibrium models based on the heterogeneity and homogeneity of node enterprises.Based on the study of mathematical properties of the models,numerical examples are used to verify the practicability and effectiveness of the models.Specifically,the research results of this paper are as follows:(1)In the three-stage supply chain network equilibrium model considering information security investment constraints,node enterprises have homogeneity in terms of utility function,investment cost function etc.This paper uses the Lagrange Multiplier Method to convert the nonlinear investment cost function of the node enterprises budget to the solvable forms of the alternative variational inequality.On the basis of using the modified projection method to solve the model,the numerical examples are used to estimate budget and cyberattack losses.Sensitivity analysis was performed when the competition effect in the network increases,the cyberattack loss changes,and the information security investment cost function changes to demonstrate the impact of the budget on the equilibrium solution,the expected utility of the node enterprises etc.The results show that node enterprises are willing to invest in information security to enhance their effectiveness within a certain range;the marginal utility of information security investment is declining lead to some node enterprises may rely on their competitors.In addition,the more enterprises in the supply chain network node,the more at the top of the node enterprises would get more profits,this result further illustrates the trend of the supply chain network to the flattened.(2)In the two-stage supply chain network equilibrium model considering information security investment constraints and heterogeneity of node enterprises.Heterogeneity is mainly reflected in the fact that the retailer layer consists of a leader with the first decision-making authority and followers making discretionary decision of the leader.This paper uses the Stackelberg game model to characterize the heterogeneity in the network,solves the subgame perfect Nash equilibrium of the model by the inverse induction method and gives corresponding proofs.At the same time,it explains the guidance role of equilibrium results for the specific investment and the determination of product transactions for node enterprises.The results show that the node enterprises' information security investment budget must account for a small proportion of total profits in order to sustain its development.Therefore,we have modified the above-mentioned supply chain network equilibrium model considering heterogeneity,and only retained the two decision variables of the combined investment amount and the investment participation rate,then analyzed in details of the leader and followers who decide the investment participation rate in the process of joint investment.The analytical solution of the model shows that the leader's information security investment participation rate is negatively correlated with the followers' marginal revenue,the followers prorate the capital investment according to the marginal revenue and compared to investing in information security alone,followers are more willing to participate in cooperation.This paper combines information security investments with supply chain network equilibrium for studying.The conclusions obtained can provide a theoretical basis and data support for the joint enterprises decision-making.In addition,the heterogeneous supply chain network equilibrium model with nonlinear budget constraints established in this paper enriches the research results of variational inequality theory,information security investment and supply chain network equilibrium.