Paper Info
Title
Securing the Containerized Supply Chain: Analysis of Government Incentives for Private Investment
Abstract
To mitigate the threat that terrorists smuggle weapons of mass destruction into the United States through maritime containers, the U.S. Bureau of Customs and Border Protection (CBP) inspects containers upon entry to domestic ports. Inspection-driven congestion is costly, and CBP provides incentives to firms to improve security upstream in the supply chain, thereby reducing the inspection burden at U.S. ports. We perform an economic analysis of this incentive program, called Customs-Trade Partnership Against Terrorism (C-TPAT), modeling in a game-theoretic framework the strategic interaction between CBP, trading firms, and terrorists. Our equilibrium results highlight the possibility that a properly run program can efficiently shift some of CBP's security burden to private industry. These results also suggest that CBP may have the opportunity to use strategic delay as an incentive for firms to join. Analysis of comparative statics shows that, with increasing capacity, membership in C-TPAT systematically declines.
Year
DOI
Venue
2010
10.1287/mnsc.1090.1105
Management Science
Keywords
Field
DocType
strategic delay,border protection,inspection burden,incentive program,containerized supply chain,private investment,u.s. port,strategic interaction,security burden,c-tpat systematically decline,government incentives,u.s. bureau,economic analysis,game theory,supply chain,nuclear weapons,queueing theory,comparative statics,terrorism,homeland security,principal agent model
National security,Homeland security,Economics,Incentive,Private sector,Microeconomics,Supply chain,Incentive program,Industrial organization,Comparative statics,General partnership,Marketing
Journal
Volume
Issue
ISSN
56
2
0025-1909
Citations 
PageRank 
References 
12
1.19
8
Authors
2
Name
Order
Citations
PageRank
Nitin Bakshi1292.78
Noah Gans261366.60