Why Supplies Run Out: A Laboratory Experiment on Information Constraints in Emergency Supply Chains

• In Event: Evaluating the Resilience of Defense-critical Supply and Demand Networks

Abstract

Timely delivery of critical supplies in emergency supply chains is essential because prolonged shortages can have severe and disproportionately adverse consequences for affected populations. A central challenge in these systems is that decision makers operate with limited visibility and communication across tiers. Shortages of critical supplies arise not only from production constraints but also from failures in supply chain visibility. This project identifies the causal effect of information environments on the efficiency of public resource allocation in disaster response systems, with a focus on the duration of beneficiary supply shortages. The primary research question asks how information constraints in emergency supply chains determine the duration of beneficiary supply shortages. In addition, the project examines how communication affects the role of visibility in these chains. Using a novel application of the classic Beer Game from operations research, the project introduces a resilience-adapted laboratory experiment to examine emergency supply chains as a public budgeting problem under uncertainty. The experiment models emergency supply chains as a network of queues in which limited visibility amplifies uncertainty, delays, and coordination failures across tiers. Increased visibility reduces inefficiencies in resource allocation under limited information by improving demand signal transmission, lowering order variability, and improving coordination across supply chain tiers. This mechanism motivates the hypothesis that increasing supply chain visibility reduces demand and service variability across tiers, which in turn shortens the duration of supply shortages at the end user tier. However, when information exceeds the processing capacity of subjects, it can induce cognitive overload and impair decision-making. Visibility determines what information subjects can observe, while communication shapes how they interact. Communication is expected to weaken the marginal benefit of increasing visibility when visibility is high, while enhancing its marginal benefit when visibility is low. The experimental data will be analyzed using Accelerated Failure Time (AFT) models, such as semiparametric or Cox proportional hazard models, to evaluate the timing of supply shortage resolution. The expected tangible outcome of this research is experimentally grounded evidence on how information and coordination environments shape resource allocation. This evidence will inform actionable guidance for public budgeting and finance institutions involved in disaster response, including the Federal Emergency Management Agency (FEMA) and the Department of Defense (DoD).

Author

• Yiseon Choi, The Ohio State University
  Presenting Author