The Crossover Point: Comparing Policies to Mitigate Disruptions.

Companies, industries, and nations often consume resources supplied by unstable producers. Perturbations that affect the supplier propagate downstream to create volatility in resource prices. Consumers can invest to reduce this insecurity in two ways; invest in and impose security on the suppliers, or can invest in self-sufficiency so that shocks no longer present devastating consequences. We use an agent-based model of a complex adaptive system to examine this tradeoff between projecting security and investing in self-sufficiency. This study finds that the significance of tradeoffs correlates with the dependence of the consumer on the supplier.