Markus Lüttenberg

Strengthening Resilience of Supply with Essential Goods

STRENGTHENING RESILIENCE OF SUPPLY WITH ESSENTIAL GOODS THROUGH PUBLIC-PRIVATE EMERGENCY COLLABORATIONS

CHALLENGES AND INCENTIVES

Markus Lüttenberg

#### **Strengthening Resilience of Supply with Essential Goods through Public-Private Emergency Collaborations**

Challenges and Incentives

#### PRODUKTION UND ENERGIE

Karlsruher Institut für Technologie (KIT) Institut für Industriebetriebslehre und Industrielle Produktion Deutsch-Französisches Institut für Umweltforschung

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# **Strengthening Resilience of Supply with Essential Goods through Public-Private Emergency Collaborations**

Challenges and Incentives

by Markus Lüttenberg

Karlsruher Institut für Technologie Institut für Industriebetriebslehre und industrielle Produktion u. Deutsch-Französisches Institut für Umweltforschung

Strengthening Resilience of Supply with Essential Goods through Public-Private Emergency Collaborations: Challenges and Incentives

Zur Erlangung des akademischen Grades eines Doktors der Wirtschaftswissenschaften (Dr. rer. pol.) von der KIT-Fakultät für Wirtschaftswissenschaften des Karlsruher Instituts für Technologie (KIT) genehmigte Dissertation

von Markus Lüttenberg, M.Sc.

Tag der mündlichen Prüfung: 27. April 2023 Hauptreferent: Prof. Dr. Frank Schultmann Korreferent: Prof. Dr. Marcus Wiens

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ISSN 2194-2404 ISBN 978-3-7315-1311-7 DOI 10.5445/KSP/1000160663

# **Acknowledgements**

I want to take this opportunity to thank the people and institutions that have supported me while working on this dissertation during my time as a research assistant at the Institute of Industrial Management and Industrial Production (IIP) at Karlsruhe Institute of Technology (KIT) from 2018 to 2022.

My special thanks go to my supervisor Prof. Dr. Frank Schultmann, for supervising my dissertation project and always creating a pleasant working atmosphere at the IIP. Furthermore, I would like to thank Prof. Dr. Marcus Wiens, the former head of my group and current professor at TU Freiberg, for his outstanding guidance and support, especially during the first years of my Ph.D. studies, and for serving on the examination committee. Also, a big thank you to Prof. Dr. Hagen Lindstädt and Prof. Dr. Kay Mitusch for reviewing my dissertation and serving on the examination committee.

Furthermore, I would like to thank the different members of my Risk Management Group over the years - Katharina, Farnaz, Flo, Florian, Miriam, and Rebecca - We've always had a great time at the institute with hilarious group meetings, events, coffee rounds, and moments that I will always remember fondly! In addition, I would like to thank Chris, Marco, and all the other colleagues and friends at IIP for their constant support and for contributing to a highly productive and inspiring work environment.

This dissertation builds heavily on my research in the BMBF project "NOLAN" (BMBF grant number 13N14457). I want to thank the project partners of 4flow (especially Alex) and TU Dresden for the stimulating collaboration. I had many intensive discussions, exchange of ideas, and collaborations with colleagues, project and research partners, as well as students, and I want to express my gratitude to a few more people for their particularly inspiring collaboration on my research work - Lotte, Amelie, Fabio, Patricia, and Milad. Additionally, I want to thank Andreas for his input and ideas regarding my defense presentation.

All this was made possible by my family, especially my parents, Brigitte and Hans-Peter, and my two siblings, Teresa and Christoph. You have supported me in all my plans and have always been there for me, no matter what. My last thanks go to my girlfriend, Laura. Thank you for your inexhaustible composure, your encouragement, and for proofreading this thesis.

Karlsruhe, May 2023

Markus Lüttenberg

# **Abstract**

Private actors ensure the supply of essential goods such as food, drinking water, and medicine to the population. However, crises such as natural disasters, human-caused conflicts, or pandemics can cause disruptions of private supply chains and, subsequently, supply shortages in the market. In this case, public actors need to become active and responsible for supplying the population with essential goods. Nevertheless, the ability of public actors to provide essential goods in a crisis is constrained due to limited resources and a lack of knowledge about the relevant commercial supply chains. Therefore, companies that produce, distribute, or sell essential goods can be valuable partners but must be adequately motivated to participate in crisis management. A promising form of collaboration to strengthen resilience lies in the concept of public-private emergency collaborations (PPECs), elaborated in different studies within the dissertation. The necessity of PPECs and their public acceptance depends on the attitude and preparation of the population, which is why the empirical investigation of these accompanying questions is another central part of the dissertation.

Five studies published as companion articles address necessary prerequisites and approaches to the design of collaborations in crises: Study A examines the PPEC concept and puts it into a more specific framework, considering logistical requirements in a game-theoretic model. The model addresses private actors' incentives to collaborate, such as a positive reputation or learning effects for internal processes. Both can provide a substantial —- not least financial —- advantage for the company in the long run. Study B investigates crises and PPECs from a company perspective by evaluating an empirical study with 398 responses from essential goods and logistics companies. The results show companies' high interest in participating in PPECs. Nevertheless, the data reveals that certain conditions, such as adequate compensation or consideration of companies' operational procedures, must be fulfilled for collaboration with public actors. Study C addresses the attitude of the population in a survey of 402 randomly selected participants and finds that the population highly values companies' involvement in PPECs. The companies' communication strategy and the population's risk perception affect the attitude. Study D analyzes the stockpiling behavior of the population in two door-to-door surveys, the first with 330 participants and the second with 402. The timing of the before-andafter survey provides a special value: The study considers possible changes due to the COVID-19 pandemic. The results show low stockpiling levels and that stockpiling has only marginally increased during the COVID-19 pandemic. Study E examines an economic experiment with 262 participants in 13 sessions to clarify the importance of safety-stock levels for companies' reputation in a failure-prone supply chain. The design made it possible to disentangle indirect losses due to customer churn and direct losses due to disruptions, thus quantifying firm reliability and customer loyalty.

Four general recommendations for the stakeholders in crisis management, public actors, private actors, and the population, are derived: First, all stakeholders must adapt their behavior and improve current protection measures and strategies against global crises and supply chain disruptions. Second, humanitarian crisis management is a team effort involving many actors. Therefore, understanding synergies, mutual attitudes, and the incentive constellation of the actors involved is a crucial prerequisite for success. Third, crisis management also includes the right communication strategy. It is not only important to contribute but also to communicate it in a successful and convincing way. Fourth, collaborative approaches, as in PPECs, where each stakeholder brings his or her strengths into the collaboration, are beneficial for all parties involved, and increase society's overall resilience.

Consequently, this dissertation provides valuable insights into the status of humanitarian crisis management from the perspective of different stakeholders. It offers the potential to improve this field of research through collaborative approaches, as in PPECs, addressing the strengths and incentives of stakeholders accordingly.

# **Contents**

# **Abbreviations**

# **List of Figures**

# **List of Tables**

# **Part I Framework, Foundations and Implications**

# **1 Introduction and Motivation**

When the Coronavirus Disease 2019 (COVID-19) pandemic started to spread across the globe, it caused strain, delays, and outages in global supply chains (SC) (WEF, 2022). The fragility of nowadays interconnected and globalized SCs came to surface (HBR, 2020). Inter alia, this pandemic came with severe consequences for many sectors of humanity (Soga et al., 2021). Public crisis management departments became active in order to cushion the most severe distortions, e.g., by disposal of protective measures of the population (DLF, 2022), or financial support of stumbling enterprises (tagesschau, 2021). However, particularly during the first wave of the COVID-19 pandemic, there are many examples of companies that adapted their production chains and started to produce, for example, medical equipment such as respirators (3M, 2022) or disinfectants (FOCUS Online, 2020). Other companies were among the first to offer COVID-19 testing centers to the population (Müller, 2021). These examples illustrate the important contribution that companies are able to provide in times of crisis.

The context of this dissertation is the analysis of crisis-related supply shortages, with a focus on preparedness and management. That is, the forward-looking planning and provisioning of the population during and after a crisis event, such as those necessitated by natural disasters, accidents, or human intervention. The management of crises in developed countries like the US or Germany that affect the population lies within the responsibility of public actors (FEMA, 2022; BBK, 2022). In severe crises, public actors have to take responsibility for the population's supply of essential goods, such as water, food, and medicine (Fang and Norman, 2014). In the example of Germany, central players in humanitarian logistics (HL) have state functions, especially civil protection authorities and the Federal Agency for Technical Relief (THW) (THW, 2022). Nevertheless, experience from past crises in industrialized countries shows that the organized involvement of private-sector actors, such as food manufacturers, retailers or freight forwarders, can contribute to a faster and higher level of supply for the population in crisis management (N. Busch and Givens, 2013). Companies can be valuable and supporting partners in these efforts.

Collaboration between public actors and private actors in the form of publicprivate partnerships (PPPs) is well known in the infrastructure sector, as well as in education, including construction, management, or maintenance of infrastructure, and provision of education services (Patrinos et al., 2009). In the crisis context, PPPs promise potential for crisis management in terms of possible efficiency and time gains — factors of particular importance in crisis management. The basic assumption here is that private actors have a high potential for resources that can support the state in crisis management. These cooperation potentials raise questions regarding the particular design of emergency logistics and problems of incentives in the collaboration (relationship) and contract design. On the one hand, private actors can support state actors in crisis management through their existing resources, on the other hand, companies may pursue their own goals that do not directly coincide with humanitarian crisis management.

This dissertation was written while participating in the NOLAN project (2018– 2022). This research project aimed at analyzing a special form of PPPs, called public-private emergency collaboration (PPEC), particularly designed to improve crisis management. The research focus laid on the identification of collaboration in the emergency context in urban areas in Germany. To this end, numerous discussions with experts from public authorities and companies shed light on the necessities and challenges of a collaborative approach. In addition, four workshops were organized, each with around 40 participants. Representatives from public authorities included, among others, emergency agencies and civil protection authorities at various levels. On the business side, representatives who are active in the essential goods sector, as well as in the related logistics, were present. This dissertation benefited considerably from the numerous feedback and valuable advice provided by the participants.

The main goal of this dissertation is to analyze PPECs (cf. Subsection 2.3.2) from an empirical and incentive-oriented perspective. Thereby, a central aspect is the empirical validation of the concept and its implications through surveys and a laboratory experiment. These empirical analyses examine the experiences, motives, incentives, and behaviors from the respective stakeholder perspective, and are complemented by game-theoretical modeling. Theoretical and empirical findings are used to identify strategic measures that enable cooperation between public and private actors for optimized crisis prevention. The game-theoretic model includes a plausible objective function of the involved actors to identify and analyze the resulting Nash equilibria. In total, five objectives are addressed in this dissertation, which are presented in Chapter 3.

The dissertation at hand aspires to provide decision-makers in authorities and companies with a set of methods to elaborate the circumstances under which companies would participate in PPECs. In addition, the crisis preparation of the population on the basis of stockpiling of essential goods is investigated, as it is a deliberate action on the part of those affected to conduct crisis prevention. Consequently, the dissertation also provides critical insights for researchers and practitioners. It can, thereby, improve the identification of the roles and responsibilities of stakeholders affected by humanitarian crises and the opportunities that arise from collaborations between public and private actors in crisis management to strengthen the resilience of the society as a whole.

The dissertation is structured as follows. Chapter 2 includes an overview of relevant terms, literature, and research gaps. Afterwards, Chapter 3 highlights the selected methodology. The main results of the respective studies A–E are reviewed in Chapter 4 before the managerial implications of the studies are highlighted in Chapter 5. Lastly, the dissertation is summed up and critically evaluated in Chapter 6. The companion articles A–E are attached at the end of the dissertation.

# **2 Theoretical Foundations**

This chapter analyzes the current state of research and practice of the topics most relevant to the dissertation. To this end, Section 2.1 deals with crises, followed by Section 2.2, which considers the three relevant actors in this dissertation: public actors, private actors, and the population. It also explicitly addresses other possible actors in the context of crises and explains why they were not considered in this dissertation. Section 2.3.1 starts with presenting cooperative approaches in non-crisis management and then moves on to collaborations in the context of crises and reviews the existing literature on PPECs. Finally, in Section 2.4 the state of the art of incentive analysis and empirical research is presented, bringing into focus the use of these methods concerning crisis management and the analysis of collaborations.

# **2.1 A Categorization of Different Types of Crises**

The term crisis originates from the greek word kr`ιsis, meaning turning point or decisive turn (Merriam-Webster, 2022). Different groups of crises, such as human-made crises, natural disasters, organizational crises or technological crises have been defined to categorize the causes (Bundy et al., 2017; MSG, 2022). According to Munich RE (2022), global economic losses caused by natural disasters alone have amounted to US\$ 280 billion in 2021 (risen from 210 US\$ billion in 2020), which equals about the GDP of Finland (Statista, 2022).

Bundy et al. (2017) elaborate on two perspectives on crises: the analysis of crises' internal dynamics and the managing of external stakeholders. The focus of this work is on the second part, as it aims to enhance managing of the incentives and behaviors of different stakeholders involved in crisis management. The crisis itself is considered a shock-like event, which leads to supply shortages in the market. The collaborative approaches considered in the dissertation are intended to strengthen resilience of the society. The United Nations define resilience in the context of crises as "the ability of a system, community or society exposed to hazards to resist, absorb, accommodate, adapt to, transform and recover from the effects of a hazard in a timely and efficient manner, [...]" (UNDRR, 2022).

Of particular interest within this dissertation is the impact analysis of crises on the population leading to a lack of essential goods. These supply crises, comprising shortages of essential goods such as water, food and medicine, caused by disruptions, typically need to be managed by the public authorities of the affected areas and the locally operating companies. An example might be a spatially and temporally limited drinking water shortage due to drought or contamination. There was, for instance, a short-term blue discoloration of tap water in Heidelberg in 2019, which triggered a run on packaged drinking water in supermarkets (Heidelberg24, 2019). Even though public authorities gave the all-clear after only a few hours, the empty supermarket shelves, which were the result of panic buying by the local population, illustrated the dynamics of such an incident. Another example is fuel shortage, as it has already occurred in the past due to low water on the Rhine and thereby blocked supply routes, or due to political decisions regarding the war in Ukraine (Euronews, 2022; Reuters, 2022).

Long-lasting crises, such as those caused by years of famine in Yemen or Sudan, must be clearly distinguished from the aforementioned crises. These types of crises differ, because the local authorities and companies are not in a position to cope with the crisis on their own. International aid measures are needed, such as those provided by the United Nations (UN), Unicef, or many non-governmental organizations (NGOs) in the regions concerned (WFP, 2022). As important as it is to manage such crises and to explore them at a scientific level, the requirements and incentives, as well as the working conditions that are to be expected by the stakeholders involved, are fundamentally different.

To summarize, this dissertation focuses on crises that can be mitigated and overcome by the respective affected parties, including public actors, private actors and the population, most effectively in collaboration. The analysis and evaluation of the consequences for the population caused by a crisis are of particular interest, mainly focusing on the (non-)availability of essential goods such as food and drinking water.

# **2.2 Stakeholders in Crises**

After specifying the type of crises considered in this dissertation, this section analyzes how the consequences of crises can be overcome through the actions of various stakeholders by addressing them in more detail.

### **2.2.1 Public Actors**

In the context of crises, public actors refer to all public institutions involved in crisis management. These comprise authorities explicitly dealing with crisis management, such as the Federal Emergency Management Agency (FEMA) in the US or the Federal Office for Civil Protection and Disaster Assistance (BBK) in Germany (FEMA, 2022; BBK, 2022). It also includes the Ministry of the Interior and the relevant parts of the legislation. In addition, actors dealing with the execution of relief measures are considered. In the example of Germany, the key players are civil protection organizations such as the THW (THW, 2022) and the BBK. Furthermore, civil protection parts of an army or the police are included. Public actors are financed through tax money (Henry, 2015). In the case of the THW, they are also heavily supported through volunteers (THW, 2022).

The main objective of public actors within crisis management is to minimize the suffering of the population (Holguín-Veras et al., 2013). From a strategic perspective, this is mainly achieved through crisis resilient legislation, data collection, and information exchange with other public and private actors before any crisis event (cf. Figure 4.4). In the event of a crisis, collecting up-to-date information, coordinating support, and supplying the population with essential goods on a timely basis is crucial. Furthermore, the prioritization of support also means that differentiating people according to their vulnerability may become necessary. This includes a plan that establishes a reasoned sequence for prioritizing population based on vulnerability, given limited supplies (Stallkamp et al., 2020), preferably before the crisis. Ultimately, public actors have the power to seize goods and resources if necessary (Sattler, 2008). Due to today's highly complex processes and digitalization in companies, this seemingly quickto-perform option, to seize resources without coordination with companies, does not lead to the desired goal as becomes clear by reference to a high rack warehouse by a logistics expert: The withdrawal-processes of these warehouses are fully automated and so complex that they can only be managed with the right qualification.

The strength of public actors in humanitarian crisis management lies within the clear objective of minimizing the population's suffering. However, the scope for public actions is limited, because they only have a restricted supply specifically designed for crisis situations. Due to the high preparedness costs of most crisis scenarios (measures are usually difficult to be planned in detail in advance), the equipment of public actors remains relatively small and is not designed to serve thousands or even hundreds of thousands of people at short notice. In addition, public actors often need time to activate the appropriate structures until aid can reach the population to ultimately help in the event of a crisis. This downside is emphasized through a lack of capacities, resources, and personnel (Lemonakis and Zairis, 2020). Private actors on the contrary, mostly have existing, well-implemented infrastructures and resources.

### **2.2.2 Private Actors**

The term private actors refers to any company working in a free market environment — from the one-person kiosk at the street corner up to a multinational software company or car manufacturer. Logistics, water, food, and medicine companies are especially interesting candidates for crisis management collaboration (Fang and Norman, 2014). These companies are assigned to the essential goods sector in the context of this work. This restriction emphasizes the clear focus on goods that are of particular need to the population in the event of a crisis. Moreover, with respect to transportation and stockpiling, logistic companies are of extraordinary importance.

The objective of private actors is to gain profits to succeed in the market in the long term (Holguín-Veras et al., 2012), which is achieved by selling products or services. According to the authors, engagement of private actors in crisis management is considered a non-profitable extra activity. However, there are many potentials within a crisis context, which may incentivize companies to engage in crisis management.

If private actors are affected by disruptions in their own SC, stockpiling products can be an option to overcome supply failures and to prevent customer churn. According to the Ponemon Institute (2011), "the cost associated with business disruption, which includes reputation damages and customer churn, represents the most expensive cost category." Hence, reputation is related to the company's credibility, even in times of crisis, to have products on hand for the customers. Customer churn, in turn, indicates the share of customers who were once customers but who no longer opt for the product or brand due to dissatisfaction (Ponemon Institute, 2011).

Companies can gain a positive reputation from engaging in humanitarian crisis management since such an engagement is closely related to corporate social responsibility (CSR) actions (Izumi and Shaw, 2015). According to the authors, CSR related actions can positively influence a brand's long-term success and reputation by raising customer awareness. In particular, the voluntary work of companies in education, care for the elderly, or poverty reduction is linked to an increase in positive perceptions by customers (Hamann and Strittmatter, 2014; Swanson and Smith, 2013). Another opportunity for companies lies within the learning outcomes from any crisis engagement that could be used for internal crisis management improvements as part of business continuity management (BCM) (Schätter et al., 2019).

The strength of private actors in humanitarian crisis management lies in the fact that many of the tasks involved, such as the production and provision of essential goods and the associated logistics tasks, are part of the private actors' everyday business and thus they are specialists in their particular field. The involvement of private actors in humanitarian crisis management certainly requires adjustments to their operational processes, but companies can often build on a wide range of experience in this area (Rodríguez-Espíndola et al., 2018; Bealt et al., 2016). Furthermore, due to globalized SCs, in particular large companies are flexible in adapting delivery quantities and target locations as needed. During the COVID-19 pandemic, for example, many industrial companies were able to adapt their plants and equipment to produce medically necessary goods such as respirators, disinfectants, or masks (3M, 2022; FOCUS Online, 2020).

### **2.2.3 Population**

In fighting crises and strengthening resilience, the role of the ones particularly affected, the population, is often underestimated. All the options and actions from the public and private actors mentioned above have the disadvantage that, in the event of a crisis, they need time to be implemented, respectively switched to crisis mode, which can take a couple of hours or even days. Sometimes, some services might not be available in a specific region. In such a situation, the population's crisis resilience is critical to overcoming the crisis (Thomas and Mora, 2014).

For this dissertation, the population's behavior in terms of resilience and preparation in a pre-crisis time is of particular interest. Different research streams deal with population behavior before, during, and after crises. Literature examines stockpiling behavior of the population, and personality traits and influence of external effects on the stockpiling behavior (Gerhold et al., 2019; Ben Hassen et al., 2021; Dammeyer, 2020). Regarding external effects, the COVID-19 pandemic can be emphasized as a major cause of analysis in current research on population behavior in crises. There is, for instance, research on the change of stockpiling behavior (Gerhold, 2020; G. Busch et al., 2020), and research on cultural influences and the importance of media coverage on stockpiling during the pandemic (Ahmadi et al., 2021). Several scientific articles have analyzed the importance of perceived threat which finally may lead to irrational behavior (Song et al., 2021; Hall et al., 2021; Sheng et al., 2021).

Other researchers have focused on the risk perception of the population towards crises. The concept of risk perception goes back to the risk paradigm of Slovic (1987), which understands "the perception of risk as a multidimensional construct, based on the combination of several subjective, qualitative perceived characteristics of a hazard (Slovic, 1987)." Using this approach, the individual risk perception of various hazards can be detected by statistically evaluating the riskiness individuals assign to a threat (Slovic, 1987). Different researchers found correlations between socio-demographic factors and risk perception in the context of crises (DeYoung et al., 2020; Doocy et al., 2013; Hoffmann and Muttarak, 2017).

In addition, risk perception and the occurrence of crisis events such as wildfires, floodings, pandemics, or global warming was investigated (van Loenhout et al., 2021; Sullivan-Wiley and Short Gianotti, 2017; Yeo et al., 2014). All these crises influence the population's willingness to increase precautionary measures. Gerhold et al. (2019) summarized the role of the population in potential crises as follows. Parts of the population overestimate the crisis management possibilities of public actors in the event of a crisis. The proactive stockpiling of goods already supports an increased resilience to a supply crisis but is currently practiced more for convenience reasons than as a precautionary measure. Socio-demographic factors such as salary (negative correlation) and household size (negative correlation) impact stockpiling quantities. For the proper handling of a crisis, Akesson et al. (2022) added that public authorities need to properly balance to convey the seriousness of the situation but not trigger a fatalism effect. Overall, the population plays an important role in successful crisis management and needs further investigation.

### **2.2.4 Other Actors**

Besides the three aforementioned stakeholders, several other actors are involved in crisis management. These are, for example, NGOs, particularly humanitarian organizations (HO), which support governmental actors in various crises. These organizations are mainly privately funded and follow different purposes compared to public or private actors (Qing et al., 2012). Typically, these NGOs have a specific mandate, e.g., supplying the suffering population with food, health-related measures, or water (van Wassenhove, 2006). The need for NGOs in the aftermath of crises mainly depends on the resilience of the respective region. Countries such as Haiti had to rely on a large amount of aid outside their own country, including the participation of numerous NGOs, after the severe earthquake of 2010 with more than 300,000 people injured (UN News, 2022). The same was true for many countries affected by the 2004 earthquake in the Indian Ocean and the following tsunami (Williams, 2006). Due to the specific circumstances in which NGOs are mainly active, they will be considered only peripherally in this dissertation.

# **2.3 Partnerships**

This section elaborates on collaboration between public and private actors. To start, the terms collaboration, coordination, and cooperation are delimited firstly and different forms of exchange between stakeholders are discussed.

Wankmüller and Reiner (2020) define coordination as the "process of organizing, aligning and differentiating of participating partners' actions based on regional knowledge, know-how, specialization and resource availability." Moreover, cooperation describes the process of operating alongside towards a common mission, sharing information and adjusting tasks in line with specifications of the current setting. Collaboration thereby is delimited as "establishing a close and intensive relationship [...] for jointly solving problems, where [...] internal standards, guidelines and rules are harmonized in accordance with others and trust is pervasive (Wankmüller and Reiner, 2020)." Based on these definitions, it becomes obvious that collaboration is the most intense form of working together.

## **2.3.1 Cooperative Approaches in Non-Crisis managment**

In the following, the various forms of exchange between different actors are analyzed in more detail. Independent from crisis events, exchange between different actors is common in the business world. The first two forms, vertical and horizontal cooperation, are taken from classic supply chain management (SCM) and are related to cooperation between different private actors but also used in the crisis management context. A third form of cooperation between NGOs with a second actor is discussed afterwards. In the end, a collaborative approach to overcome the impact of crises is presented.

According to Hernández and Pedroza-Gutiérrez (2019), vertical cooperation refers to different actors along the SC, such as, to give an example, in the garment industry, the cotton producer and the jeans manufacturer. In no-crisis times, cooperation can be established in joint research or sustainability projects to increase possibilities and flexibility. It also helps to reduce costs (e.g. use of standardized contracts, trust in professional interactions) and increase profit margins. The joint added value can be used as a premium to the final sales price. In the event of a crisis, these arguments in favor of collaboration still remain while the focus of collaboration is changing: Cooperation between the actors can be used to respond quickly to possible new requirements.

Li et al. (2008) set out that this form of vertical cooperation can positively influence agility, meaning alertness to changes (improved possibilities to cope with threats and opportunities), and response capability (after having identified changes, to have increased resources to respond to them). The overall goal of vertical cooperation is to set up cooperation that benefits both partners and reduces costs (Martin et al., 2018).

Hernández and Pedroza-Gutiérrez (2019) define horizontal cooperation, e.g., if two logistics service providers (LSP) cooperate among entities in the same tier. The authors elaborate that this form of cooperation is mainly seen as a measure to strengthen SC resilience to help each other out in case of need or crisis. Martin et al. (2018) add that such a form is implemented to improve the productivity of core activities, reach efficiency gains in supporting activity costs, and achieve production increases based on economies of scale. In the specific case of LSPs, joint route planning or sharing warehouse capacities leads to economies of scale and increased shipment frequencies. Hence, products can get to the customer cheaper and faster (Verdonck, 2017).

There are also some limitations, relating to these forms of cooperation. Within both of the mentioned settings, cartel regulations must be obeyed by the actors involved, as typically competition policies implemented by lawmakers shall ensure a free and fair competition. These regulations aim to lower prices and improve the quality of products, which shall protect all other businesses from unfair competition and consumers from welfare losses.

In case of horizontal cooperation, the problem of two or more companies coordinating their behavior or entering into agreements with one another for the disadvantage of competitors or customers could arise. Such cooperation, if directed to the disadvantage of the customer, could be subject to the ban on cartels (Bundeskartellamt, 2022). However, in a collective announcement by the European competition authorities on the COVID-19 pandemic, it was also emphasized that temporary measures in the area of entrepreneurial cooperation are necessary and appropriate (European Commission, 2020; OECD, 2020). These measures apply to ensure the supply of the population and the fair distribution of scarce products, which are limited in time and content and do not in principle constitute a violation of the ban on cartels.

Specifically for crisis management, a third form of cooperation is established: Public actors cooperating with NGOs or private actors cooperating with NGOs. Once again, the idea is that both partners have specific knowledge and resources, which, if combined, better serve their own objectives and minimize the suffering of the population (Kovács and Spens, 2007). For the specific case of collaborations between LSPs and HOs, Bealt et al. (2016) highlight that they help to better serve the suffering population after a crisis. This is achieved through increased efficiency and effectiveness on the part of the HO, as well as improved transparency in the handling of funds. LSPs, in turn, benefit directly and indirectly from cooperation as reputational gain in public perception can be achieved, possibly resulting in positive economic effects.

### **2.3.2 Public-Private Emergency Collaborations**

One of the first explicit mentions of PPPs in the crisis context was when FEMA organized a conference entitled "Building Resilience through Public Private Partnerships" in 2011 (N. Busch and Givens, 2013). This was done to account for the importance of private actors engaging after crisis events in the US and to present them as valuable partners on the same level. FEMA generally referred to crises caused by natural disasters, like the Tornado in Joplin in 2011, which hit American soil with high regularity or terrorist attacks. Companies such as Home Depot and Walmart provided financial support, but volunteers were also flown to the crisis area in partnership with Delta Airlines. Before that, private engagement in humanitarian crisis management had not been considered a sustainable framework over a long-term period.

An emerging form of cooperation in a crisis context is defined by Wiens et al. (2018) as PPEC. The authors define a PPEC as "a special form of public-private partnership (PPP) deliberately designed for improved crisis management by joint coordination and cooperation between private and public representatives." The background to this is the consideration that public actors quickly reach their limits in crises and that private actors have many resources and much know-how to support public authorities in PPECs if the right incentives are applied.

Within PPECs, both partners can learn from each other in a crisis context. For public actors, huge efficiency gains are possible by improving digitized and standardized processes within their operations, as is already standard for many companies today. Private actors can benefit from a positive reputation through collaboration, as well as from the opportunity to learn lessons for internal crisis management through new areas of business.

The concept of a PPEC starts in a non-crisis situation, in which public and private actors already exchange information with each other or run trainings together in the framework of regular SCs. They can include mechanisms for emergency measures as well as essential goods and services in the event of a crisis. This could lead to coordination difficulties between the actors. While public actors in the context of crisis management have the task of and, in principle, have a primary interest in minimizing the population's suffering, private actors also should have a heightened self-interest in helping because a suffering population potentially means a lack of customers and employees in the affected region.

Following Bealt et al. (2016), there are three fundamental drivers for companies to engage in crisis management: internal ethical drivers, external stakeholder drivers, and internal corporate drivers. Since both employees and customers are affected by a crisis (both as those needing help and as those helping), a company has a great incentive to contribute to a quick resolution of the crisis. A company that switches to "normal market supply" in a crisis region too early also runs the risk of possible accusations of enriching itself at the expense of the affected population. Occupational safety and health measures inappropriate to the crisis can also lead to a public pillorying effect, as shown by the example of the company Tönnies during the early times of the COVID-19 pandemic (tagesschau, 2020). In this case, an uncontrolled infection outbreak had occurred in the workplace, resulting in environmental and animal welfare organizations calling for protests, and the German Armed Forces had to assist with corona testing on the plant premises.

An additional problem to be overcome is the issue of uncertainty. Hardly any predictions regarding the specific extent and spatial appearance of a crisis can be made in advance. In addition, there is a discrepancy between the objective functions of public and private actors as already discussed.

Moreover, Gabler et al. (2017) describe the issue of unidirectional communication as a further risk, which could occur when one of the partners prevails over the other. In such a scenario, no communication at the same level takes place and the bypassed partner has an increased interest not to act cooperatively. The extensive dimension of public-private cooperation envisioned in a PPEC should be emphasized, which can take place in various areas (e.g., communication, planning, goods, storage, transport or personnel).

As part of a validation conducted with experts of the NOLAN project, considering a scenario in which public actors request emergency goods from private actors via shared logistics sites was discussed, and special requirements for this to happen were made by both sides. Public authority representatives rely on cooperative companies but ask for the following requirements for a successful collaboration. The market power of ample food retail chains must not be allowed to concentrate further; in particular, potential antitrust and public procurement law problems in connection with PPECs must be clarified in advance. In addition, public actors must have a monitoring option that allows access to emergency stocks at any time, and the costs for the state must not be too high.

Private actors are willing to help with storage capacity and resources, provided that public actors take responsibility and make clear commitments regarding the selection and quantity of goods. Also, the payment must be adequate, and the processes must be able to be integrated into everyday business. Finally, governmental monitoring access must be limited exclusively to the contractually defined emergency stocks.

Further fields of application of a PPEC are conceivable in the cyber-security and communications sector and in healthcare. Regarding cyber-security collaborations, Hare (2009) emphasizes that companies are taking part in cyber-security exercises primarily due to a sense of civic-mindedness. Furthermore, the learning perspective, to gain insights from the collaboration with public partners, which can be useful for their own operations, is of high interest to the companies. As a frequently stated requirement, the costs of any participation have to be reasonable to the companies, so clear communication of benefits from the side of the public actors and the creation of mutual trust is necessary.

# **2.4 Incentive Analysis and Empirical Research in the Context of Crisis Management**

The topics discussed in the previous sections on crisis (prevention), stakeholders, and cooperation potentials raise questions about the actors' experiences, motives, incentives, and behaviors. For this purpose, analyzing PPECs from a strategic, incentive-theoretical perspective is highly promising. One method used for this purpose in this dissertation is game-theoretic modeling. In the following, different game-theoretic terms, which are used in the context of this dissertation, are presented.

### **2.4.1 Role of Game-Theory**

Game theoretic modeling includes identifying and analyzing Nash equilibria (NE) and determining plausible objective functions of the involved players. According to Nash (1951), in a game-theoretic setting N players interact with each other. Different strategies lead to different utility-levels for the respective player. According to the player's preference, he can rank different strategies and every player chooses a strategy from his strategy set to maximize his objective (Bartholomae and Wiens, 2016). The objective of a player may depend on both the player's and the rival players' strategies. Bartholomae and Wiens (2016) further elaborate that in such a situation, a NE can be defined as a stationary vector of strategies for all players where none can improve their outcome by solely changing their own strategy.

The players' preferences and hence their utility functions can take diverse forms, depending on their objectives (Shapley and Rigby, 1959). In the context of this dissertation, for example, it might be purely about profit maximization or minimizing the population's suffering. It can also be about reputation gains or learning effects in executing one's activities, which are beneficial for a player. Also, a mixture of different criteria is conceivable (mutli-objective approach) and describes in sum the overall objective function of an individual actor (Sasaki, 2019).

For this dissertation, mechanism design also plays an important role. It is defined as a system to make an individual reveal his private information (Russo et al., 2018) and how the individuals can be incentivized to behave in a way so that the overall outcome of all parties is improved (Jackson, 2014). The basic assumption for the dissertation context is that private actors have a high potential for resources to support public actors in crisis management. These aid measures must be brought into play through appropriate mechanisms, such as contracts and relational contracts, on the part of public actors. Relational contracts are self-enforcing, as no external authority (such as a court) is required to enforce contractual interests. However, the contract is fulfilled by mutual agreement and in the best self-interest (Gintis, 2000).

### **2.4.2 Role of Empirical Analysis**

Another central element of this dissertation is the empirical analysis of relevant stakeholders' behavior, motives, and objectives. Based on surveys and laboratory experiments, the experiences and assessments of the stakeholders are directly queried. Strategic measures are identified, enabling the cooperation of public and private actors for optimized crisis prevention. The population is considered an active part of successful crisis prevention. Furthermore, empirical research complements economic modeling.

In the following, terms used in the context of this dissertation are reviewed. Especially quantitative survey methods play an important role. For example, respondents can use Likert scales to indicate their agreement with a set of propositions about beliefs or actions (Bradburn et al., 2004). Answers to quantitative questions can be evaluated statistically. Mean comparisons, for example, help to compare different answers. Correlation analyses can reveal relationships between different answers and the so-called items, or regression analyses can be used to determine causalities between different items (Backhaus et al., 2016).

Exploratory factor analysis is used in some of the studies. This includes checking the extent to which different items measure the same scale based on the responses (Kartal et al., 2022). A measure of scale coherence is called Cronbach's alpha. Cluster analysis, in turn, is used to determine "partitioning similar objects into meaningful classes when both the number of classes and their composition are to be determined" (Fonseca, 2013).

# **3 Research Objectives**

Up to this point, the actors relevant in crisis management, and different forms of interaction between the actors were presented. The already existing approaches of the PPEC concept were also emphasized.

This chapter highlights the objectives of this dissertation's five studies, which deal with different topics in the area of crisis management and public-private collaborations in crises. All studies have in common that they examine ways to overcome potential undersupply of the population in times of crises. The importance to establish supply in crises is addressed in different ways in these studies. By highlighting and analyzing problems while also providing methodologically grounded solution approaches, this dissertation aims to support an societal resilience to situations of undersupply by making crisis management more effective and agile. In this regard, the five studies show the importance and prerequisites of beneficial cooperation for all stakeholders and communication at the same level. In the next sections, various objectives of this dissertation, addressed by the different studies, are elaborated.

# **3.1 Strengthening Resilience through Public and Private Emergency Collaboration**

## **3.1.1 Understanding the Central Dynamics and Incentives of PPECs**

The collaboration of public actors with private actors in crisis management is relatively new and scarce in the field and in research (Wiens et al., 2018; Gabler et al., 2017), especially in comparison to research on interactions of HOs and private actors (Nurmala et al., 2018; Fikar et al., 2016). In addition, even if the collaborative action of several actors is considered to have great potential in science, analyses still predominantly evaluate the behavior of individual actors instead of a combined approach (Behl and Dutta, 2018).

Nowadays, there is still a need for more scientific research for PPECs that includes both the logistical requirements of such a partnership and the incentives and strategies of both partners. Dealing with logistical problem settings helps to understand the requirements, characteristics, and challenges in the operational implementation of a PPEC. Game-theoretic modeling elaborates conditions in the collaboration of both actors that are necessary for ensuring stable and efficient relationships. Combining both methods helps to quantitatively model the conditions and effects of PPECs, taking into account the different objectives of the parties. Thus, on the one hand, operations research methods, conditions, and implementation possibilities of a PPEC can be considered. On the other hand, strategic equilibrium situations can be thoroughly analyzed through gametheoretic modeling. From a methodological point of view, there are only two works of Nagurney et al. (2016, 2019), combining game-theoretic analyses and logistics approaches in a crisis context. However, they do not focus on the collaboration of public and private actors.

The requirements for cooperation and stable equilibrium situations, in which all partners have a strategic self-interest in maintaining the previously established agreement between the partners, can be defined with the help of relational contract theory (Rodríguez-Pereira et al., 2021). This helps to quantify the requirements for such a partnership and considers the different objective functions of public and private actors. In turn, both stakeholders can understand more precisely how to better align their goals and what the basic requirements for successful collaboration between public and private actors in crisis management are. Study A addresses these objectives.

### **3.1.2 Identifying Companies' Incentives to Improve Crisis Management**

In humanitarian crisis management, the adequate amount of support with the right timing is key to success. Public actors alone are often not able to reach these goals. If they can convince private actors to participate collaboratively in humanitarian crisis management, the suffering of the population can be minimized significantly (Wiens et al., 2018; Holguín-Veras et al., 2013). One approach is to align the multitude of strengths with the main objective of the companies mentioned in Section 2.2.2. Under the economic and game-theoretic assumption that companies act in a profit-maximizing manner (at least in the long run), the incentives for companies to participate in humanitarian crisis management need to be elaborated.

Humanitarian engagement is one practiced approach of private actors to carry out CSR (Johnson et al., 2011; Dahlsrud, 2008). Porter and Kramer (2011) were among the first to bring up the value of CSR for companies when they partner with public actors. Companies could not only maximize profits with the right CSR strategy, but also create a sustainable motivational factor within its value chain (Madsen and Rodgers, 2015; Dahlsrud, 2008).

As elaborated on in Subsection 2.3.2, the main drivers of private actors to engage in crisis management are internal ethical drivers, external stakeholder drivers, and internal corporate drivers (Bealt et al., 2016). However, even in the case of altruistic behavior in crisis relief, if companies are considered to protect their employees and customers, it can be seen as a way to keep the business running. Furthermore, any such engagement could be considered a new business opportunity.

From the findings of Subsection 2.3.2, it becomes clear that any possible engagement of private actors in crisis management must be addressed in a comprehensible way. Any involvement on the companies' part, for whatever motivation, could portray them as crisis profiteers to the public. For private actors, this raises the question of how crisis participation, especially in collaboration with public actors, should be portrayed to the outside world. Furthermore, it is often unclear which tasks could be performed by the private actor in a PPEC. Sodhi and Knuckles (2021) and Wiens et al. (2018) show that private actors themselves know best what they can contribute to a collaboration. The objective of Study B is, therefore, to provide a comprehensive empirical investigation and elaboration of tasks that arise in crises, as well as to contribute to an appropriate distribution of tasks, particularly from the perspective of private actors in the essential goods sector.

### **3.1.3 Investigating Population's Attitude and Collecting Information on Public Acceptance of Firm Engagement**

After analyzing private actors' incentives and possibilities to engage in a PPEC, Study C takes the population into focus. From Subsections 3.1.2 and 2.2.3 the question arises how current and potential customers assess corporate involvement in PPECs. After all, the best-intended actions will ultimately be ineffective if the wider public and — in particular — the firms' customers do not appreciate the effort. This requires a change of perspective in the analysis of the stakeholders.

As already mentioned in Subsection 2.2.2, Izumi and Shaw (2015) argue that good corporate citizenship is one way to build a reputation of being a responsible player in the market, which is also perceived by the customers in that way. The economic importance of customer perception of corporate behavior has been considered in detail by Maignan (2001), which has also been confirmed by Madsen and Rodgers (2015) and Cho et al. (2019).

However, all these studies are only built on a conceptual basis to evaluate the measurement of attitude or consider other areas than crisis engagement. Moreover, none apply their concepts to a real-life customer survey. Therefore, Study C empirically analyzes how the population perceives the participation of companies in PPECs and whether this also has consequences on the purchase intention of the respondents.

# **3.2 Stakeholder Analysis with Focus on Risk Perception, Incentives and Objectives**

To determine the need for and the conditions of PPECs, it is essential to analyze the behavior of the population and private actors in detail. The general role of both actors in crises has already been pointed out in Subsections 2.2.2 and 2.2.3. The following sections shed light on both actors' individual preparation for crises and the implications for the other actors to succeed collaboratively in crises.

## **3.2.1 Including Risk Perception and Stockpiling Behavior of the Population**

Two key characteristics that influence the behavior and participation of the population stakeholder group in crisis management are the individual's risk perception and the stockpiling behavior. Both factors can be examined before a crisis event to provide a valuable assessment on how resilient the population is on its own. This information is highly relevant for public and private actors, particularly during a crisis. The more accurate public actors' data on the behavior and stockpiling of the population is, the better they know how precautionary the population is, and the better they can provide help to the ones that need it the most.

Akerlof et al. (2013) and Champ et al. (2011) indicate that people who experience natural hazards tend to be more willing to invest in risk reduction measurements. Gerhold et al. (2019) find no macrosocial but only personal reasons for people to perceive higher risk when it came to food shortages within the COVID-19 pandemic. So far, no research has investigated the influence of risk perception of the population on the behavior for individual crisis management as well as on the attitude towards PPECs. As this is highly relevant for a successful collaboration of public and private actors, one objective of Study C is to examine the aforementioned relationship.

The second important factor for public and private actors within a PPEC to be aware of is the stockpiling behavior of the population before crises. In Section 2.2.3, personality traits, external effects, and sociodemographic factors have already been examined as influencing factors and catalysts for the individual stockpiling behavior of the population (Ahmadi et al., 2021; Ben Hassen et al., 2021; Gerhold, 2020; G. Busch et al., 2020; Dammeyer, 2020; Gerhold et al., 2019).

The main reasons indicating the importance of knowing the stockpiling behavior of the population for a successful collaboration of public and private actors, are summarized in the following: First, the quantification of essential goods stockpiled at the households indicates the individuals' awareness of possible threats and crises. Second, it gives public actors an overview of one measure to improve crisis resilience and shows the need for fast interventions if free market supply would collapse in the course of a crisis event. Third, having sociodemographic data linked to the stockpiling behavior helps PPEC members to prioritize the help to the ones that need it the most. Fourth, long-lasting crises such as the COVID-19 pandemic may have changed the stockpiling behavior of the population sustainably, which changes the premises for a PPEC. Within related research studies, answers from the participants in the questionnaire about a particular behavior, differ from what can be observed in reality. This might be due to social desirability or other biases arising in questionnaires. Analyzing both, the intention and the actual behavior in reality, helps to gain a holistic picture. Study D combines these objectives to provide comprehensive insights into this research area.

### **3.2.2 Analyzing Behavior of Companies in Disruptions**

Turning the perspective, stockpiling is also a meaningful strategy for private actors. As any merchant of a physical good, stockpiling may help to battle supply difficulties from upstream SC members or demand surges from their customers. These supply difficulties may have various reasons, for example, local instabilities or short-term supply difficulties due to a supplier change.

One particular interest within this dissertation is the analysis of supply failures due to disruptions in the SC. In the case of supply failure, if the merchant does not hold stockpiles, he will not be able to sell goods to the customers, which is a direct loss. This may cause customers to regard the merchant as an unreliable seller and cause them to stop buying at the merchant in the future (cf. customer churn discussed in Subsection 2.2.2).

Customer churn leads to direct losses, as a product cannot be sold. These losses can be measured by comparing sales data from non-crisis times with data from crisis times, but also by a second component, which is reputation related. It is the accumulation of no-shows of customers dissatisfied with the merchant's service because the product is unavailable in the store. Therefore, they will not buy the product in the future at this merchant.

According to the literature, one established variant of a reputation experiment is the product quality game, where participants, when playing over a more extended period (> 10 rounds) with each other, are willing to pay a premium for quality (Gans, 2019). While the general structure is similar to the structure in Study E, no experiment so far has considered supply disruptions, availability reputation, and customer churn rate, in combination. Study E's objective is to contribute to these various streams of research.

# **3.3 Interplay of the Developed Studies**

Table 3.1 provides an overview of the involvement of stakeholders within the studies to outline the individual studies' relation to each other. A cross in the corresponding place can mean one of the two things: on the one hand, the respective stakeholder is directly assessed as part of a model or in the context of an empirical investigation, in the form of an experiment or a survey (M-column). On the other hand, the respective analyses have direct implications and recommendations for action for the counterpart and were therefore selected in the table in the R-column. Furthermore, in the last column, a connection to collaboration is denoted for the five studies. Studies A–C have a clear collaborative approach to crisis management. All three studies specify the PPEC concept from different stakeholder perspectives. Studies D and E analyze the behavior of individual stakeholders in a crisis context without collaboration. Both studies examine conditions that show the impact of crises on the respective stakeholders and outline the need for PPECs accordingly. Bringing these studies together, this dissertation yields a holistic contribution to enhanced crisis management by applying methodological analysis and presenting clear strategies to be used in practice.

M = Modeling

R = Recommendation

Table 3.1: Stakeholder-related context of studies and the role of collaboration

As this chapter illustrates, the present dissertation contributes to the stream of research focusing on societies' resilience and public-private collaboration in crises. The mentioned objectives were considered in the five studies. The research objectives will be answered within the presentation of the individual Studies A–E in the next chapter. The cross-study implications for the different stakeholders of a PPEC in terms of improvement of knowledge, requirements, and tasks, are discussed in Chapter 5.

# **4 Summary of Studies and Results**

This chapter gives an overview of the study contexts and contributions, as well as on the results of the five studies that are part of this dissertation. Study A looks at the concept of a PPEC and defines the depth of cooperation between public and private actors. Study B investigates the willingness of companies to participate in PPECs. Studies C and D both deal with the risk perception of the population. In addition, Study C gains insights into how the population values company participation in PPECs, Study D assesses the population's stockpiling behavior, and examines to what extent there is a need for improvement. Study E quantifies the economic value of availability reputation in a disruption prone SC.

## **4.1 Study A**

This section refers to the article "Public-Private Collaborations in Emergency Logistics: A Framework Based on Logistical and Game-Theoretical Concepts". This article was written in collaboration with Florian Diehlmann, Lotte Verdonck, MarcusWiens, Alexander Zienau, and Frank Schultmann. It is published in the journal Safety Science as Diehlmann, Lüttenberg, et al. (2021).

### **4.1.1 Study Context and Contributions**

The study's objective is to examine the concept of a PPEC in detail, taking into account logistical framework conditions and restrictions to supply the affected population. A game-theoretic model enabled the analysis of conditions and incentives for private actors to participate in a PPEC. To address the previously mentioned objective, equilibrium situations (see Subsection 2.4) are modeled in which the actors involved are willing to cooperate strategically.

First, the study analyzes the impact and development of crises in a dynamic context, which is followed by the examination of crisis management and the extent to which crisis management plays an essential role for public and private actors. Furthermore, the study contains an examination of PPPs, which are known from infrastructure or education projects, for example. This PPP concept is modified and transferred to possible cooperation in humanitarian crisis management.

Figure 4.1 depicts the basic setting of a PPEC as described in Subsection 2.3.2. Both, public actors and private actors, follow different objectives with different strategies. The interdependent decisions and collaborative approaches including the exchange of resources aim to improve logistical capacities to better serve the population in crisis events.

Figure 4.1: Basic setting of a PPEC (see also Figure A.3)

The study contributes to the body of literature in several ways. First of all, an overview of general forms of public and private collaborations is given. Moreover, the logistical challenges of PPECs are examined starting from typical problems of PPPs. Further logistical challenges in establishing a PPEC are identified as different power positions, problems in trust and data protection, and the distribution of costs. This raises questions about capacity planning and the precise use of resources. The game-theoretic model builds on these considerations, uses contract design and non-cooperative modeling and is based on the logistical requirements, standards, and challenges that evolve from the operations research perspective. The assumption is made that the firm cooperates mainly for two reasons: Reducing crisis-related costs and gaining a positive reputation.

### **4.1.2 Results and Discussion**

Study A quantitatively models PPEC operations while considering the problemspecific challenge of the actors' different objectives, which were outlined in Subsection 2.3.2.

In the study, the different logistical characteristics of public and private actors in disaster are taken as the basis for the game-theoretic model. This can be, for example, the extent of damage D (D > 0), which in the model is defined as the degree of undersupply, a resource-based emergency reserve x n, or budget parameters (B) of the state. Within the game-theoretic PPEC model, the study provides insight into the motivation and incentives of the partners, their strategies, and the way they interact with each other. Therefore, the model focuses on the partners' participation constraints, which define the extent of cooperation, the impact on the outcome, the conditions under which the partners' contributions become strategic substitutes, and reputation effects.

Figure 4.2 illustrates the results of the game-theoretical model by illustrating the willingness of government (x-axis) and firm (y-axis) to cooperate in a normalized scale between 0 (no cooperation) and 1 (full cooperation). In order to determine the NE (the equilibrium point at which stable cooperation between state actor and firm is possible), both actors pick their optimal strategy, given their co-player's strategy. This is reached where the best response functions of both actors intersect. The black curve represents the response function of the state. The lower blue curve shows the response function of the firm, varied by reputational influence (upper blue curve) or prohibitively high cooperation costs from the firm (dashed line). The negative slope and convexity of the curves illustrate the submodular nature. The greater the willingness of one partner to cooperate, the lower the incentive for the other partner to cooperate. The submodular character within games evolves, where players' strategies are substitutes and not complements.

Figure 4.2: Best-response functions of public and private partners (see also Figure A.4)

Finally, the study illustrates how the state can use a mechanism design approach to incentivize firms to help with their resources to achieve a better supply of the population. Therefore, the state has to transfer a minimum transfer payment to the firm in order for the firm to be better off than without cooperation. However, from the government's perspective, the amount of this transfer payment must be below the firm's crisis-free budget.

This study offers a variety of starting points for future research. Especially the use of real-time data can help improve the processes within the PPEC concept and ensure that the population is better served in a crisis. At the same time, it is necessary to take a closer look at the motivations and incentives of the various stakeholders. This is done in this dissertation in Study B, which deals with companies' experiences, ideas, scope for support and willingness to support in the crisis context.

# **4.2 Study B**

This section refers to the article "How to Enhance Company Engagement in Public-Private Emergency Collaborations in the Supply of Essential Goods". This article was written in collaboration with Alexander Zienau, Marcus Wiens, Ole Hansen, Florian Diehlmann and Frank Schultmann. It is submitted to a scientific journal as Lüttenberg, Zienau, et al. (2022).

### **4.2.1 Study Context and Contributions**

The study's objective is to determine to what extent and under which conditions companies are willing and able to collaborate with the state by, for example, providing assistance in the form of the relocation of their resources towards a suffering population in a crisis situation, such as in a natural disaster or a severe pandemic.

There are many examples of the general engagement of companies in crisis management in collaboration with NGOs, resulting in reputational gains for companies (see Subsection 3.2.2). Bealt et al. (2016) particularly describe the motives of logistics service providers to cooperate with NGOs, and Madsen and Rodgers (2015) point out that cooperation with NGOs implies that crisis-related CSR engagement attracts more attention from the stakeholder groups relevant to the company.

However, cooperation with public authorities as opposed to NGOs differs primarily in terms of the far-reaching measures that state actors can take in the event of a crisis. These include, for example, a crisis-specific adaptation of existing (market) regulations through extreme measures, such as seizing company resources. In contrast, companies can be valuable and supportive partners by providing know-how, personnel, resources, or logistics capacities. This raises the question of which benefits and risks companies see in a PPEC and how they can be motivated to consider collaboration as a strategic option.

In this context, Study B empirically investigates German companies' experience and motivation regarding emergency collaborations with authorities. For this purpose, a survey with a total of 25 closed questions was prepared. Companies from the food, healthcare, and logistics sectors were randomly selected and contacted online. These sectors were chosen because they are responsible for producing and supplying essential goods. 398 valid responses were received.

Figure 4.3 shows the three research questions (RQ) and the corresponding hypotheses, which were derived from literature. In particular, the prioritization of different measures from the companies' point of view, especially with the distinction between resource-related and coordinative services, is investigated. The questionnaire also elaborates on the role of reputation and in which ways companies believe they can provide particularly good assistance.

### **4.2.2 Results and Discussion**

The results of the study clearly show that many companies have been involved in crisis contexts in the past. In general, there is a high level of willingness on the part of companies to provide assistance in the form of PPECs. However, a fundamental condition for the companies to collaborate is a fair financial

Figure 4.3: Research questions and hypotheses (see also Figure B.1)

compensation for their services within a PPEC. This financial aspect is of high importance to the companies and must, therefore, be accounted for by the state by a transparent communication and realistic budgeting.

One central insight from the survey is that 91% of the respondents would share information with government agencies (the same amount as those who would share information with companies in their own supply chain). Thus, companies would be significantly more willing to share information with government agencies than competing companies outside their SC, which is indicated by only 77%. Consequently, authorities should build upon this potential and show ways and initiatives to get access to this data.

Table 4.1 shows a selection of different types of assistance (column "Type") that companies assume government agencies require. The five items mentioned were assigned to the two categories Resources and Coordination using factor analysis. On a binominal scale with the answer possibilities yes = 1 and no = 0, companies responded with a Mean = 0.639 and a SD = 0.373 (n = 398) in favor of the Resources, which is significantly higher (one-sided t-test with p = 0.000) than Coordination (Mean = 0.451, SD = 0.436; n = 398). This means that companies see a higher need for resources on the government side. Somewhat contradictory to the previous statement by the companies, they prefer to support with Coordination rather than with Resources.

<sup>n</sup> = 398, 0 =No support needed, 1 =support necessary

Table 4.1: Factor analysis for Resources Index and Coordinating Assistance Index (see also Table B.7)

Another statistically significant finding of this study is that some insights on PPECs match with the findings from the cooperative field between companies and NGOs (see Subsection 2.3.1). This relates, for example, to the right mechanism of division of tasks between the actors. From the companies' point of view, the public actor should not decide on the distribution of tasks alone. Instead, each partner can best assess the type of assistance it can provide for a particular context. Furthermore, companies see the potential to promote their PPEC engagement. Other (non-financial) benefits need to be emphasized more by public actors.

The study's findings suggest that companies are generally willing to engage in humanitarian actions. Under specific conditions, they also consider collaborations with public actors as beneficial for them. The willingness to contribute to such a collaboration depends on the type of company, appropriate compensation for the assistance provided, and the consideration of companies' operational processes in crises as the main requirements. Authorities need to keep this in mind when getting into contact with companies.

In future studies, the sample size can be increased further or the focus from Germany can be expanded to Europe or other industrialized nations to achieve better comparability of the results. More distance to the COVID-19 pandemic, or the consideration of current developments, such as the war in the Ukraine, possible changes in companies' behavior and willingness to cooperate could be investigated. In addition, accompanying qualitative surveys of individual companies could provide more in-depth information to the quantitative data of the survey. From a scientific point of view, a comprehensive quantification of the substantial assistance provided by companies would also help counter typical survey problems, such as those caused by the social desirability bias.

# **4.3 Study C**

This section refers to the article "The Attitude of the Population towards Company Engagement in Public-Private Emergency Collaborations and its Risk Perception — A Survey". This article was written in collaboration with Amelie Schwärzel, Miriam Klein, Florian Diehlmann, Marcus Wiens, and Frank Schultmann, and is published in the International Journal of Disaster Risk Reduction as Lüttenberg, Schwärzel, et al. (2022).

### **4.3.1 Study Context and Contributions**

Study C has two main objectives. On the one hand, the focus lies on the analysis of the attitude of the population toward corporate participation in PPECs. On the other hand, the risk perception of the population concerning crises and their handling of crises is evaluated by taking the example of the COVID-19 pandemic. Combining both objectives, this study investigates a possible connection between attitude regarding company support and risk perception.

The impact of large-scale crises such as the COVID-19 pandemic is far-reaching, affecting lives and livelihoods and seriously affecting businesses, economies, and, thus, the global economy. National and international actors engaged in post-disaster relief efforts face unique challenges in providing for and protecting populations. Governmental disaster preparedness and crisis risk management agencies reach their material and human resource limits when dealing with large-scale crises. Private sector measures, such as flexible production conversion for the manufacture of medical protective equipment, represent often untapped potential in disaster relief. To build resilient supply structures, longterm partnerships between the public and private sectors can be a crucial factor in crisis management. Collaboration between the state and the private sector in the form of a PPP in a crisis context requires a detailed analysis of the partners' reasons and incentives to participate (Wiens et al. 2018).

Figure 4.4: Four phases of disaster management cycle (see also Figure C.1)

Figure 4.4 depicts the four phases addressed in disaster management, which build the so-called disaster management cycle: mitigation, preparedness, response, and recovery (see Coppola (2011)). The PPEC concept spans all four phases. The mitigation and preparedness phase are about preparing for an emergency in the form of coordination and training. The collaborative fight against crises and their long-term impact takes place in the response and recovery phase.

In contrast to the two previous studies presented, Study C focuses on the perspective of the population. Customer perception is a critical component that should be considered in corporate action (Sheffrin and Zhao, 2021). It can be managed as part of a CSR strategy, such as active participation in governmentresponsible crisis management. The approach of Study C is inspired by the work of Madsen and Rodgers (2015), who used the concept of stakeholder theory to link CSR and CFP. Moreover, it is inspired by Maignan (2001), who examined consumers' perceptions to link CSR with the related economic success of the company (see also Young and Makhija (2014)).

It is argued in the present study that the possible crisis management relief of companies is closely related to the concept of CSR. In addition, an adapted concept of risk perception is added from Slovic (1987) to the survey design to account for the specifics of a crisis, like the COVID-19 pandemic for the consumers. The paper investigates possible correlations between risk perception and the attitude of the population to determine the extent to which the persons' characteristics, in particular risk perception, are linked to their positive attitude.

From the perspective of companies, the lack of predictability of crisis interventions can lead to costs that are difficult to calculate while they, at the same time, can also lead to new impacts on corporate reputation. To this end, this study analyzes public perceptions toward the private sector's readiness to intervene in crisis contexts and the extent to which potential involvement influences customer perceptions.

The quantitative data collection is based on an online population survey of 402 individuals conducted between November 29, 2020 and January 9, 2021. The target population constitutes a representative sample of the overall population of Germany. Therefore, individuals aged 16 or older with web access were recruited as a sample.

With the help of selected hypotheses based on concepts of risk perception (see also Slovic's risk paradigm presented in Study C), attitude measurement, and the results of previous studies (Gerhold, 2020; Gerhold et al., 2019), the population's viewpoints regarding private-sector involvement in a PPP in a crisis context are examined.

### **4.3.2 Results and Discussion**

Since the attitude of the population towards corporate participation in PPECs cannot be queried directly, a set of ten different questions was posed to the participants. The participants were then able to express their agreement on a 5-point Likert scale. An exploratory factor analysis (EFA) was conducted on the basis of the responses (see Table 4.2). As a result, seven items, with factor loadings from 0.476 to 0.698 were assigned to the positive attitude index. A subsequent Cronbach's alpha calculation to test the reliability of the created positive attitude index resulted in a satisfactory value of 0.778.

<sup>1</sup> The values <sup>4</sup> and <sup>5</sup> on the <sup>5</sup>-point Likert scale count as 'Agreement'

<sup>2</sup> The values <sup>1</sup> and <sup>2</sup> on the <sup>5</sup>-point Likert scale count as 'Agreement'

3 Item values recoded for factor analysis

<sup>n</sup> = 349

Based on the evaluation of the positive attitude index, it is found that the population supports and appreciates corporate involvement: Most respondents find the involvement praiseworthy, evaluating it as selfless and altruistic. Therefrom, it follows that the engagement of companies in crises can undoubtedly meet with a positive public response, especially if the crisis contribution is made cooperatively alongside official disaster control. This fundamentally positive public perception of a company in a partnership is also expressed in the willingness to buy the company's products in question.

Further results of the survey illustrate the existence of a low risk perception such as imminent dangers and a lack of knowledge about already existing partnerships between the state and the private sector for crisis intervention. Here, a need for an increased supply of information, also on the part of public authorities, is uncovered. The study results detect a positive correlation between the positive attitude and the risk perception of those involved, but not between the positive attitude and sociodemographic factors such as age or gender.

The study offers various starting points for further research in this area. In general, such studies can encounter the problem of social desirability, i.e., respondents overestimate CSR-related attributes in surveys, and thus distort the results (Auger and Devinney, 2007). This creates a gap between attitudes and actual behavior (Kuokkanen and Sun, 2016). For purchase intention questions, it can be questioned if stated intentions are consistent with actual behavior. Purchase intention responses in empirical studies have not necessarily shown actual purchase behavior in hindsight (Carrington et al., 2010). Accordingly, a review of payment intentions and actual purchase decisions may investigate this further. Moreover, an assessment of the transferability of our results to other cultural circles, particularly focusing on internationally operating companies, could provide meaningful insights.

# **4.4 Study D**

This section refers to the article "An Empirical Survey on the Effects of a Global Pandemic regarding the Population's Stockpiling Behavior". This article was written in collaboration with Miriam Klein, Florian Diehlmann, Marcus Wiens, and Frank Schultmann. It is submitted to a scientific journal as Lüttenberg, Klein, et al. (2022).

### **4.4.1 Study Context and Contributions**

This study contributes to current research by providing a better understanding of the amount of stored essential goods, using the rural communities in Baden-Württemberg, Germany, as an example region. The central RQ is:

How intense is the stockpiling behavior of the population in terms of crisis prevention, and is there a measurable effect of this behavior in terms of severe disruptions as in the COVID-19 pandemic?

To answer this RQ, the study tests four hypotheses regarding stockpiling quantity, possible observed changes in stockpiling behavior in the wake of the COVID-19 pandemic, reasons for the possible change in stockpiling behavior, and demographic factors affecting stockpiling behavior.

Regarding the resilience of successful crisis management, authorities such as the FEMA or BBK recommend the population to stockpile food, drinking water, and medicines to be prepared for a supply failure (see Table 4.3 for different categories and recommended amount per capita and day). A permanent stockpiling quantity for ten days is specified for these so-called essential goods. Particularly given the ongoing COVID-19 pandemic and the intensification of crisis events triggered by climate change (for example droughts, leading to transportation disruptions and supply shortages), the stockpiling of certain goods is of growing importance. To initiate and control appropriate measures, authorities first need valid data on the status quo of stockpiling. Nevertheless, neither the public nor the private sector collects data on stockpiling levels in the population.

However, a scientifically sound database is essential for weighing further steps. This is why the stockpiling levels are one main objective to be quantified as part of the survey. A door-to-door survey (S1) in early 2020 with 330 participants is presented within the study. Figure 4.5 shows the location of the different municipalities in Baden-Württemberg where the survey was carried out. As the COVID-19 pandemic spread immediately after completing the first round of surveys, the chance to further investigate the changes in stockpiling behavior through the impact of a global pandemic opened up. Therefore, we conducted a second door-to-door survey (S2) in the summer of 2021 with 402 participants using the same streets as in the first survey.

1 including bread, potatoes, noodles and rice

2 including egg replacement products

3 including sweets, salt, prepared dishes

Table 4.3: Necessary stockpiles per capita and day according to BBK (see also Table D.2)

This study's main contribution is the quantification of participants' stock levels in relation to the eight categories (see Table 4.3) that the BBK identifies as essential assets for disaster preparedness. In addition, different sociodemographic groups of individuals with varying stockpiling behavior were identified.

### **4.4.2 Results and Discussion**

The results of Study D support the assertion that there is a shortage in the stockpiling behavior of the population. Based on the responses regarding the suggested stockpiling amounts in the different categories issued by the BBK, an exploratory factor analysis (EFA) was performed to provide statistical evidence of a coherent food category system. The results from this calculation were incorporated into a stockpiling index (SI) developed as part of the study. In the EFA, it is possible to create a monoscale factor based on the responses that included all food categories except fats and oils. This category had no significant loading on the SI, which were confirmed by a subsequent Cronbachs' alpha test. The fats and oils category was removed accordingly. Subsequently, the SI is

Figure 4.5: Map of selected municipalities in the federal state of Baden-Württemberg with its location in Germany (see also Figure D.1)

calculated as an equally weighted average of the data on the remaining food categories.

Just a few (i.e., 8.86%) of the respondents could demonstrate a ten day supply of essential items as recommended. Conversely, the results suggest that COVID-19 showed short-term effects on stockpiling behavior yet stockpiling returned to similar levels in the long term. The second round of surveys did not uncover an increased fear of food shortages due to the COVID-19 pandemic. Unaffected by this are the short-term retail shortages as they occured globally, and in Germany, for example, specifically related to toilet paper and pasta (Bulka, 2020).

Another important finding is the importance of information management on the part of public authorities. The reasoning of Jones (2020) is that constant media coverage increases subjectively perceived risk and the argument of Donthu and Gustafsson (2020) is that the continued dissemination of certain "fake news" by some parts of the pouplation does little to calm people's concerns and fears. Taking these arguments as a basis, the study examines the importance of reliable, rational, and transparent communication on the part of public agencies. This is important to avoid hysteria and hoarding when a crisis occurs.

In the context of cluster analysis (Figure 4.6), the study shows differences in the stockpiling behavior of people belonging to different sociodemographic groups. For example, age correlates positively with the stockpiling quantity of the respondents. Moreover, a slightly negative but significant correlation of SI with food shopping frequency is observed, meaning that people in S2 who bought groceries less frequently tended to have higher SI values. In opposition, net income correlates negatively with stockpiling quantity.

Public authorities should prioritize support within a crisis according to vulnerability and need for essential goods. The study identifies three clusters of stockpiling types. Cluster 1 is designated as Actual Hoarders and includes individuals who are older on average than respondents in the other clusters. In this cluster, compared to the others, crisis prevention is given as a reason for stockpiling more often (though again, only about 30% of people gave this as a reason). They more often agreed with the fear of COVID-19 infection, while they less strictly agreed with the statement that they had stockpiled during the initial lockdown to overcome food shortages at local supermarkets. At the same time, their monthly net disposable income is lower compared with the other two clusters, and they go grocery shopping less often on average.

Cluster 2 is identified by the survey as Convenience Hoarders who had food stocks that were sufficient for about a week. Respondents from this cluster particularly stock foods that are easy to store (e.g., cereal products such as pasta or granola, or UHT milk). The final Cluster 3 is identified as Contemporary Non-Stockpilers who do not stockpile enough in any of the food categories.

Figure 4.6: Cluster analysis of stockpiling behavior (see also Figure D.4)

Particularly Clusters 2 and 3 do not stockpile enough: Public actors need to particularly address and motivate these groups of persons to specifically increase stockpiles.

In future studies, a larger number of respondents could be surveyed, for example, specifically from urban areas, across Germany, or even internationally, to obtain a larger sample size and draw further conclusions. A more in-depth analysis of the reasons and causes for stockpiling behavior and changes, especially with a focus on risk perception, can provide further information on this topic.

# **4.5 Study E**

This section refers to the article "Supply Chain Disruptions, Firm Reputation and Customer Loyalty –– An Experimental Study". This article was written in collaboration with Marcus Wiens, Milad Baghersad, Christopher Zobel, and Frank Schultmann. It is submitted to a scientific journal as Wiens, Lüttenberg, et al. (2022).

### **4.5.1 Study Context and Contributions**

The objective of Study E is to measure the economic value of the availability of goods for a firm. To this end, an economic experiment with over 250 participants was conducted to investigate the research question of how reputation, induced by a repeated game structure, in a disruptive SC interacts with a firm's stockpiling behavior and the customer's loyalty to the firm. Moreover, the question arises whether the company has any incentive at all to build a reputation for availability of goods.

Figure 4.7 presents the repeated-game setting over five blocks, each consisting of ten periods, simulating a simple two-player market interaction between a customer (C-player) and a firm (F-player). There are two different treatments of the game played. In the first treatment, the short run (SR) treatment, C-player and F-player are matched as a new pair every block. In the second treatment, the long run (LR) treatment, the same C-player and F-player are matched for all five blocks. With help of random procedure, the experiment simulates supply disruptions that a player in the firm role can prepare for by choosing a costly safety-stock (SS) or not (cf. Figure 4.7). In the figure, an exemplary distribution of disruptions is listed. Gray boxes represent disruptions. These disruptions can last one to three periods based on the experiment design. Except during disrupted periods, the F-player can invest in SS of one, two, or three items.

In this study, critical properties of relational contracts are experimentally measured, such as reputation building, reciprocity, and loyalty in a risk context. Players in the company role can protect themselves against supply failures by building up a SS. In contrast, players in the customer role can switch for free to a dummy player as a "competitor" of the company. The dummy player is always able to supply but with a lower utility to the C-player. Switching costs incurred if C-players want to return to their F-player.

It is experimentally tested whether and to what extent the loyalty or churn rate of customers is influenced by the reputation of the company. In addition, the company's reputation plays an important role in long-term customer-company relationships (interactions). A company can build a positive reputation in phases of frequent disruptions by reliably delivering products.

Figure 4.7: Schematic distribution of disruptions (gray boxes) and effects of different safety stock levels on the availability of goods. (see also Figure E.1 and Table E.1)

If building corporate reputation works, measuring higher loyalty levels in blocks three to five as a result should be possible, as consumers should be more willing to stay at the player-company, independent of disruptions and short-term nonavailability of products.

In the context of reputation for delivery capability, customer loyalty can be measured by whether the customer still buys or buys again from the playercompany (and not from the risk-free dummy firm) after a disruption in blocks three to five. This gives a loyalty index L ∈ [0, 13] (cf. Figure 4.8 and Figure 4.10).

Figure 4.8: Loyalty-critical rounds over the blocks 3 – 5 (see also Figure E.2)

### **4.5.2 Results and Discussion**

Three different hypotheses are tested with the data gathered from the experiment. The first one is that in both treatments, SR and LR, the SS-level is significantly different from zero, and customers predominantly choose the F-player instead of the bot. Given that only in 24.5% of all periods, F-players had a SS-level of 0 and the data from Table 4.4, which presents the choice of the customer (for overall results and separated for SR- and LR-treatment), the first hypothesis cannot be rejected.

Table 4.4: Customers' overall choice of firm or bot (see also Table E.4)

The second hypothesis is twofold. On the one hand, it is tested whether the SS-level of firms in the LR-treatment is systematically higher than in the SRtreatment. The descriptive data from Figure 4.9 already shows that this is the case. The statistical test also confirms the finding. A Mann-Whitney-U-test reveals a highly significant effect (U = 411.00; p < 0.001\*\*\*) and also a high effect size (Cohen's d = 0.977).

In the second part of the hypothesis, the general adherence of customers is tested, especially whether the loyalty level is higher after a disruption period in the LR-treatment compared to the SR-treatment. No significant differences were found for general adherence (LR = 21.47 periods with F-player, SD = 6.058, in comparison to SR = 20.46 periods with F-player, SD = 5.668). Concerning customer loyalty after a disrupted period, the loyalty index in Figure 4.10 shows this separately for LR- and SR-treatment. The differences are again statistically significant (Mann-Whitney-U: U = 2622.00; p = 0.013\*) with a Cohen's d of 0.382, indicating an effect size low to medium.

The last hypothesis deals with the question of whether firms that choose a higher average SS-level over the initial two blocks achieve higher sales in unaffected periods and affected periods in the LR-treatment. The idea here is to measure reputation building and reciprocity. As formulated in hypothesis H3, the expected interaction corresponds to the classic reciprocal pattern of relational contracts. In the SR-treatment, the duration of the interaction between the customer and F-player is too short to build a reputation. The first 20 periods (two blocks) for building SS are considered since the firms can use these initial periods to form a reputation and build a relationship with their customers. A correlation analysis is conducted. The strong and highly significant correlation in the LR-treatment provides evidence for a reputation effect. It confirms that an indirect effect also stabilizes sales based on a relational contract between seller and buyer. The hypothesis cannot be rejected.

This study is the first to show that relational contracts can also unfold in a risk context. Measuring reputation effects and the properties of relational contracts in the context of frequency-based risk is more difficult compared to, for example, product quality issues in a stable and deterministic market environment (Gans, 2019). As a discussion and starting point for further studies, the block length of ten rounds for the SR-treatment could be considered in more detail. This seems too long, as ten rounds can already be enough to establish a bond between the company and the customer. Moreover, the interruptions considered in the experiment are exogenous disturbances of the transaction ("noise"), which make it difficult for the customer to distinguish between the exceptionally reliable and particularly unreliable behavior of the company. In light of these challenges, the study can be seen as an important first step into the relevant research field of risk-based relational contracting.

Figure 4.9: Moving average of safety stock (see also Figure E.3)

Figure 4.10: Loyalty index (see also Figure E.4)

# **5 Managerial Implications**

After presenting the main contributions and results of Studies A–E, the managerial implications are discussed in the following. As mentioned in Section 3.3, different stakeholders involved in a PPEC are part of the cross-study analysis. These are public actors, private actors, and the population. This chapter starts with general implications applicable to all stakeholders and moves on to the separate implications and recommendations for each stakeholder based on the different study results. Table 5.1 summarizes the implications for the different stakeholders in the end.

## **5.1 General Implications**

Global crises and supply chain disruptions are present threats and will increase in the future. All stakeholders have to adapt and improve current protection measures and strategies. In the recent past, the COVID-19 pandemic and very slow-building crises such as climate change clearly show that no single stakeholder can manage to overcome the respective crisis alone. Collaborative approaches, as conceptualized in the framework of a PPEC, are a helpful step in this direction. Collaborations between different stakeholders, where each stakeholder brings his or her strengths into the collaboration, benefit all parties involved. Furthermore, humanitarian crisis management also includes the right communication strategy, especially from the side of the companies. It is not only important to contribute but also to communicate it convincingly through channels that are seen as trustworthy by the population.

# **5.2 Implications for Public Actors**

Public actors are central to humanitarian crisis management as demonstrated in Section 2.2.1. Based on the results of Studies A, B, and D, the following implications for public actors in terms of an improvement of humanitarian crisis management can be drawn:

In a game-theoretic modeling approach of Study A, the participation constraints of public and private partners to collaborate in a PPEC were formulated. Based on standard game-theory arguments (e.g., Bartholomae and Wiens (2016)), a player ("the company") should always choose the option which provides him with a better utility, when stuck between two options. In the PPEC example, the public actor needs to increase the private actor's benefit compared to non-collaborative case, which could be reached through direct payments or a decrease in transaction costs for the company. These transaction costs occur through high contract costs and can be minimized through more standardized agreements between public and private actors.

In addition, Study A integrates the aspect of reputation as an addition to the standard cooperation model. The idea here is that participation in a PPEC, similar to CSR commitment, can be received positively by potential customers, thereby increasing the willingness to pay (Besiou and van Wassenhove, 2015). This has two main implications for the public actor. On the one hand, in this case, since collaboration rates are (imperfect) substitutes, it can reduce their contribution to collaboration and put correspondingly higher amounts into crisis provision. On the other hand, the public actor should ensure that the hoped-for positive image of private actors' participation reaches the population in this form. This is discussed in more detail in Studies B and C.

Study B shows that companies are valuable partners regarding resources, infrastructure, and know-how to public partners. Probably the most important key message derived from the study's results for public actors is that companies are generally willing to participate in PPECs. For this to happen, public actors must make the benefits much more straightforward. Public actors should pay particular attention to the following aspects when approaching private actors to engage in PPECs. As one main factor, public actors need to consider transferring fair cost-based payments to the companies. Another factor relates to the two sides of how companies evaluate the reputation gained through a PPEC. Reputation is seen as both an advantage and a disadvantage by companies. In order to counteract doubts about the benefits or to send a clear signal to the population about the positive aspects of the commitment, target-oriented communication by public actors would be an excellent way to proceed.

The results in Study B indicate that public actors should take advantage of the fact that the more non-financial benefits private actors can derive from a PPEC, the fewer transfer payments they expect for their PPEC engagement. On the one hand, cost reimbursements for costly aid activities by private actors should be faster and with less bureaucracy. On the other hand, these non-financial incentives must be advertised and promoted more prominently.

Among the non-financial incentives that public actors should consider, the most important conditions are first that companies want to protect their business processes before they help others. Second, they want to avoid delivery or service failures to business partners due to the PPEC engagement. Third, unused resources of public actors (such as trucks or personnel) should be made available to support the relief efforts of private actors. Fourth, public actors also have opportunities to accommodate private actors in legislation and labor law. This is what happened, for example, when the ban on trucks being operated on sunday's was lifted in Germany at the beginning of the COVID-19 pandemic (Verband Verkehrswirtschaft und Logistik, 2020). Mitigating private sector risks, such as through Hermes guarantees (BMWK, 2020), can also be another incentive for private actors. In this case, commercial activities would be covered by the government against economic or political risks.

The survey data reveals that 91% of companies are willing to share company data with public authorities. This offer should be taken advantage of, for example, by enhancing IT interfaces. This should make it possible for companies to provide their data for public emergency preparedness in an unbureaucratic way, and, if possible, anonymously. One way to do this would be to use blockchain technology. The data, in turn, may be used by public actors to fill their demand model calculations with more accurate data. Overall, authorities need to develop a better communication strategy and networks to promote the benefits of collaborative crisis management to companies and the population in a more detailed and convincing way.

Study D looks at the stockpiling behavior of the population in the area of essential goods and whether there have been changes due to the experience with the COVID-19 pandemic. For this purpose, two representative survey rounds were conducted in rural areas of Baden-Württemberg. The main findings are that the stockpiling quantities do not correspond to the advice of the BBK and that the COVID-19 pandemic has only led to short-term increases. In the long term, there has not been a significant change in the stockpiling behavior of the population. Increased stockpiling could be achieved through a more targeted communication strategy by public actors. There were contradictory recommendations in the course of the pandemic, e.g., on the topic of correct stockpiling. Hoarding purchases could have been prevented, in which an unnecessarily large number of goods that were only available in limited quantities in the short term were procured by a few individuals.The study also gives insight on the handling of fake news (see Jones (2020)). A key finding of the COVID-19 pandemic is that, while there were short-term shortages in supermarkets, overall, the supply situation is stabilized by private actors at all times. Sensitization measures, such as information campaigns on the part of public actors, should point out that the supply could be significantly more limited in other crises to create a broader awareness of this. In addition, a cluster analysis, in which different types of stockpiling strategies were identified based on different sociodemographic factors shows significant differences in the stockpiling behavior of the population. Accordingly, public agencies should target groups of people who are lagging in terms of stockpiling behavior.

# **5.3 Implications for Private Actors**

Some of the implications for private actors of Study A have already been touched upon in the section before. In a nutshell, besides monetary compensation for a private actor's engagement in a PPEC, they also perceive an increase in reputation as an opportunity from a PPEC. An important point here is the credibility of the action. Even though corporate engagement in PPECs is highly valued, it depends significantly on the quality and quantity of corporate outreach. The population wants the private actors to engage convincingly. The results of Study A further suggest that companies achieve a learning effect for their corporate BCM through participation in a PPEC. Within crises where the private actors are affected, business continuity is the highest priority in the eyes of the companies. In the long term, this learning can lead to cost reductions in the event of disruptions in the supply chain.

For Study B, responses from 398 companies involved in the manufacturing and distribution of essential goods and associated logistics companies were analyzed. One of the impacts noted is the many industries and sales sizespecific findings (see Study B). For example, the medical goods sector is rating reputation losses worse than LSP or food.

In the area of possible ways to assist (here divided into the two superordinate categories of coordination and provision of resources), companies, on the one hand, see a higher need for public actors in the provision of resources. On the other hand, when asked about their aid preferences, they tend to provide coordination aid more. This contradictory presumptuous statement could be clarified by a more precise idea of the respective tasks and associated financial and non-financial incentives. The study showed that companies see the most significant advantages in a PPEC as being able to quickly return to normal operations, gain early insight into the crisis, and establish contacts with authorities and other companies. Companies see the most significant disadvantages in legal risks.

The issue of liability, to name an example, is unclear to many companies. This is followed by possible obligations through contracts with authorities, leading to (negative) consequences that are difficult to assess. Furthermore, disclosure of internal data, loss of personnel, and loss of profits are possible disadvantages. The issue of contracts is viewed less critically by companies that have already had contact with public authorities in the event of a crisis compared with companies overall (46% cite this as a disadvantage compared with 51% overall). The loss of personnel due to double burdening is cited significantly more frequently by companies that have already had contact with public actors in a crisis (54% compared with 49% overall). The last two aspects illustrate that companies' expectations can change considerably as a result of contact with public actors.

Overall, it can be seen that there are slight, however significant, correlations in that the smaller the willingness to participate in a PPEC, the more frequently disadvantages are mentioned, and the higher the willingness to participate in a PPEC, the more frequently advantages are mentioned.

Study C examines the public's attitude toward corporate participation in PPECs. The results of this study initially confirm the hypotheses from Studies A and B that the population generally favors the participation of companies in PPECs. More than 85% of respondents (n=349) agree with the statement that participation in a PPEC represents an opportunity for the company to take social responsibility. In addition, a similar agreement rate confirms that crisis management can succeed more efficiently. Concerning the credibility of information, it is shown that the highest level of agreement (on a 5-point Likert scale) is with the company's own experience (Mean = 4.32, SD = 1.029). Educational brochures from government agencies and their websites (Mean = 3.97, SD = 1.028) reach the second highest level of agreement and are thus rated as more credible than companies' annual reports (Mean = 3.15, SD = 1.289), and significantly more credible than what companies present in advertising (Mean = 2.01, SD = 1.009). These results clearly show that companies should only cautiously communicate their participation in a PPEC to the outside world on their own but should, in particular, use the available communication channels of the public actors for this purpose.

The respondents have a clear prioritization regarding the credibility and motivation of companies' actions in the area of relief measures. Multiple aids were cited as the most credible (4.34 on a 5-point Likert scale), showing long-term involvement from the corporate side over the one-time aid action. This is followed by using various resources (4.11), which is said to be preferable to the classic "donation of money" by companies. Low advertising measures on the part of the companies for their actions were also explicitly named as a factor of credibility (3.68). This factor goes hand in hand with the lack of credibility of company announcements on their website (2.34). The latter two results again illustrate the problem faced by many companies. If they want to get involved in a PPEC, this long-term participation, generally viewed as positive by potential customers, must be communicated via the proper communication channels. Otherwise, the damage is greater than the hoped-for benefit. According to the study results, specialized journals and educational brochures published by government agencies are perceived as particularly credible, while advertising is perceived as particularly untrustworthy. It is also found that a positive attitude of respondents towards a PPEC engagement is associated with an increased willingness to purchase from private actors. Companies should take advantage of this fact in their business strategy.

In addition to the positive aspects of CSR, however, in line with Madsen and Rodgers (2015), companies should consider that financial benefits will not materialize in the short term. Instead, a longer-term perspective over several years must be taken.

Study E is an experimental study analyzing the threat of customer churn as an incentive for a firm to take precautions against supply disruptions and establish a reputation for product availability. It compares the effects of two different settings for reputation building on customer response and firm performance. The results show that it is worthwhile for companies to invest in costly safety stocks, not just for self-protection motives.

While precautionary stockpiling on the part of companies is costly, it has one key advantage: customer loyalty immediately after supply disruptions is significantly higher in the LR-treatment than in the SR-treatment and also has a noticeably positive effect on companies' sales. In addition, it can be deduced from the study results that only those LR firms that use the first 20 rounds to build a reputation as a reliable supplier can effectively address customer responsiveness to be more loyal. In this case, the reciprocal pattern of efficient cooperation typical of relational contracts can be generated. However, this correlation also implies the downside of relational contracts: LR firms that miss this opportunity experience a more severe decline in their revenues. This is most likely due to their inability to meet the higher expectations of LR customers.

The following message can be drawn for firms as the primary business implication of applying relational contracts in a risk context: SS are worthwhile not only for self-protection but also as a precautionary risk management strategy that leads to fewer supply bottlenecks on the one hand and more stable and crisis-tested customer relationships on the other. In highly uncertain and crisisridden times due to pandemics, wars, climate change, and cyberattacks, a loyal customer base serves as insurance to succeed in the market.

# **5.4 Implications for the Population**

As the target group of the two actors mentioned above, the population's role is unique. On the one hand, they are the ones who suffer in crises and need to be helped. On the other hand, their behavior before and during crises can also significantly contribute to the success of crisis management. The results of Studies C and D elaborate on the measures and recommendations for the population. Study C analyzes the responses to the risk perception and attitude domain about corporate participation in PPECs of 402 respondents. The results revealed a highly positive correlation between the two constructs. The study's key finding is that the population does not only value corporate engagement in PPECs positively, but it is also highly correlated with their perception of risk. Various findings on the credibility of corporate actions and how this commitment should be communicated to the public by companies to gain trust and, thus, positively influence the population's perception, is already elaborated in the previous subsection on corporate implications. Furthermore, the lack of knowledge about CSR measures of companies (see Van et al. (2020); Lee et al. (2019)) and cooperation between public and private actors in the crisis context in particular, is also relevant for understanding the population.

The study results show that just over half of the respondents (54.5%) were aware of collaborations in this area, but only 11.9% could name the actors of a specific collaboration. Here, in addition to the communication and information strategies already discussed for public and private actors, heightened awareness and increased need for information on the part of the population are necessary. PPECs are a useful crisis management tool. If they are ignored or not taken into account to the extent they should be, problems in the individual's crisis resilience can occur. For example, the individual's approach to crisis prevention is defered or is considered irrelevant to the individual because the public and private actors are relied on ultimately.

Another phenomenon identified in Study C, which is also a well-known phenomenon of detectable asymmetry in other areas of consumer behavior, is the difference between statements and actions (Carrington et al., 2010): What the population states ("we value engagement"), which is about an intention, and where they finally buy products (actions), diverges. This may have several reasons, one of them being the social desirability bias: one person assumes what the correct action for moral or ethical reasons may be. However, for convenience, financial reasons, or for selfish motives (e.g., vacation trips to distant countries by plane), the person does not act according to the previously described value compass (Kuokkanen and Sun, 2016).

The other central aspect covered in Study C addresses respondents' perceptions of risk. By forming a risk perception index aligned with the risk paradigm of Slovic (1987), it is shown that a more risk-averse respondent is more positive toward corporate involvement in PPECs. This means that PPECs appear to the respondents as a sensible measure for minimizing risk. The COVID-19 pandemic shows that personal knowledge of a COVID-19 infection from one's own social network results in significantly increased risk perception. This highlights once again that one's direct experience significantly influences behavior and perception, which may not necessarily be advantageous in terms of comprehensive crisis management, or may lead to incorrect conclusions.

The results of Study D show that the population does not stockpile enough essential goods. Here, sufficient is equated with the ten-day quantity recommended by the BBK. As a conclusion from the study it can be stated that the population needs to enhance stockpiling to fulfill the quantity recommendations. In none of the categories listed by the BBK, even an average stockpiling quantity of seven days is achieved. Understandably, it is difficult to stock fresh vegetables (2.84 days of stored product on average), fruit (2.93), or meat, fish, and eggs (3.97) for ten days, but there are also dried or frozen long-lasting alternatives. Especially for products that can be stored well, such as beverages (3.95) or cereal products (4.3), there is a need to catch up on stockpiling. The awareness of possible crisis scenarios for which it may be worth to stockpile is an important aspect that, therefore, needs to be emphasized. However, even during the COVID-19 pandemic, there is only a slight increase in crisis awareness, indicating a slightly increased perception that crisis scenarios are a good reason for more stockpiling (from 8.2% before pandemic to 9.6% during pandemic). The study also shows that a lack of stockpiling is not caused by a lack of space for storage facilities, as only 15.1% of respondents would stockpile more if they had more space. Moreover, 35.5% of the respondents justify the possible perishability of goods for not stocking more.

Overall, the results of Study D clearly imply that the population can make a decisive contribution to preventive crisis management through their stockpiling behavior. In addition, the population should also be involved in PPEC considerations so that crisis management can be more holistically considered and organized in the future.

Table 5.1 summarizes the implications for the different stakeholders.

#### Implications for stakeholders

#### General stakeholder implications

Table 5.1: Implications of cross-study analysis for stakeholders

# **6 Conclusion**

# **6.1 Summary**

Major humanitarian crises, such as the globally recognizable climate change or the COVID-19 pandemic, are becoming more frequent and intense in recent years (OCHA, 2022). In this regard, preparatory actions by various actors play an important role. These can increase the resilience of the respective stakeholders and support successful crisis management during the course of the crisis.

The analysis and prognosis of crisis occurrence, course, and extent, and especially crisis management are critical and highly interdisciplinary topics of increasing importance. Geographical, natural scientific, sociological, economic, and political components play a role, to name only a few of the fields of workareas involved. The present dissertation contributes to advancing the state of interdisciplinary crisis research particularly in the areas of society, economy, and politics.

In developed countries, public actors are in charge of managing crises that affect their population. However, other studies have already shown that public actors need cooperation partners for particular areas. No public actor alone can successfully manage crises.

In order to take a closer look at the topic of crisis management and to examine its potential, five studies were developed as part of this dissertation. Particular attention was paid to the views of the various stakeholders. The studies shed light on the current state of crisis management and how it could be improved, specifically in terms of collaborations between public and private actors. Thereby, the studies evaluate different collaboration designs and identify potentials for improvement in preventive measures from the point of view of various stakeholders.

PPECs as a concept for improving crisis management were examined in more detail, revealing various other potential improvements. The approach of the dissertation is to improve PPECs by considering the specifics of the different stakeholders and their incentives and objectives. Empirical studies, economic experiments, and game theoretic evaluations were used as methodologies in this context.

The main contributions can be summarized as follows. The studies provide a better understanding of the status quo of collaborations between public actors and private actors. The objectives and incentives of different stakeholders involved in crisis management are uncovered. The concept of PPECs to improve crisis management is further enhanced. Stockpiling behavior of the population is measured to determine population's current preventive measures in terms of essential goods. Reputation mechanisms of companies are defined and elaborated as one factor to make the positive impact of engagement in PPECs visible to companies.

Study A focuses specifically on what is known about crisis management to date and, in particular, the preliminary work on PPECs. The results show that private actors have received too little attention in humanitarian crisis management. The PPEC concept is put into a more concrete framework on logistical requirements with game-theoretic modeling. In this context, private actors' incentives to collaborate, such as a positive reputation or a learning gain for internal BCM, are included in the modeling.

Study B looks at crises and PPECs from a company perspective. As part of an empirical study, 398 responses of companies were evaluated from the essential goods sector, as well as logistics companies. The results show that companies are highly willing to participate in humanitarian measures. Especially concerning possible cooperation with public actors, the respondents need certain conditions to be fulfilled. The willingness to contribute to a PPEC depends on the type of company, adequate compensation for the provided assistance, and consideration of the operational procedures of companies in crises as the main requirements.

Study C takes the essentially affected stakeholder, the population, into focus. In a survey of 402 randomly selected participants, the results show that the population highly values companies' involvement in PPECs. Nevertheless, the quality and quantity of corporate communication, the communication channel used, and the communication strategy strongly affect the population's perception. In addition, the results show a highly significant correlation between risk perception and approval of engagement in PPECs.

Studies D and E shift the collaborative approach of the three previous studies to the specific behaviors and incentives of the two actors, population (Study D) and private actors (Study E). As part of Study D, a representative door-to-door survey in rural communities in Baden-Württemberg, Germany, was conducted prior to COVID-19 pandemic to better understand the actual amount of stored essential goods with 330 participants. The results of the study reinforced findings suggested by other studies that the population does not stockpile enough essential goods on its own. The results of a second survey during the COVID-19 pandemic in the summer of 2021, with 402 respondents from the same communities, illustrate that COVID-19 had only short-term effects on stockpiling behavior. In the long term, stockpiling returned to similar levels as before.