Modelling social risk amplification, harmful products, and product recall as the basis of a risk assessment procedure

Public response to risk often over- or under-estimates risk because individuals and social processes interact. This paper applies agent-based modelling to understand public risk perception in response to product recall through a risk model that forms the basis of a risk assessment procedure. We model collective response to risks associated with the consumption of contaminated or defective products in the context of product recalls during contamination scandals such as the cases of contaminated milk products in China. The main contribution is that we demonstrate how agent-based modelling can be used to study social risk amplification in a product contamination crisis. The main innovation of our model is that it integrates an event discovery step – in which risk perceivers assimilate risk through the risk beliefs of others, direct experience, and product recall decisions – with a recreancy assessment step – in which risk perceivers make judgments about wrongfulness. We show how the model can be calibrated with a consumer survey and validated. Finally, we demonstrate how to use the model for assessing and managing risk in organizational crises of a similar nature.