Differential game evolution of food quality safety based on market supply and demand.

Abstract

Frequent outbreaks of food quality and safety problems have seriously damaged the interests of consumers and reduced their confidence in China's food safety. In this study based on market supply and demand, we design a differential game model between food supplier and food retailer by considering different decision‐making situations. We also analyze the optimal revenue of the food supplier and food retailer on food quality efforts, the overall return of the supply chain, the level of food quality and safety, and their evolutionary characteristics. Results of the analysis indicate the following. (a) From the situation of decentralized decision‐making to the situation of decision‐making under the incentive strategy, a Pareto improvement occurs in the food quality and safety strategy of food supplier, food retailer, and even the entire food supply chain. (b) The optimal revenues of the supplier and retailer, overall supply chain revenue, and efforts of the supplier and retailer are all affected by changes in market supply and demand, resulting in drastic fluctuations. On the whole, food quality tends to improve over time and will fluctuate slightly due to changes in market supply and demand. (c) If the market supply is stable when supply exceeds demand and the market demand turns from a downward trend to an upward trend, then food quality safety risk will be higher than in other periods.