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Discrete Dynamics in Nature and Society
Volume 2013 (2013), Article ID 695384, 5 pages
http://dx.doi.org/10.1155/2013/695384
Research Article

The Game Analysis of Manufacturers’ Political Connections on Product Safety in Supply Chain: Evidence from China

School of Management, Harbin Institute of Technology, Harbin 150001, China

Received 18 June 2013; Revised 20 September 2013; Accepted 29 October 2013

Academic Editor: Tinggui Chen

Copyright © 2013 Zhao Na and Wang Fusheng. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

This paper studied the political connections on product safety in supply chain. In market economy, information asymmetry exists throughout the entirety of supply chains that ought to ensure product safety. Due to the existence of game relations between the government and manufacturers in the aspects of product safety and regulation, the formation of market equilibrium depends on political connections between the government and manufacturers. Based on study and analyses of a static game model and a dynamic game model, this paper reveals that governments and manufacturers must use positive political connections to achieve product protection and supervision of safety throughout the supply chain. On the other hand, negative political connections lead to losses of both governmental credibility and social profits. This study indicates that inherent mechanism of political connections exists in the supply chain; it will help to enrich the theory of supply chain.