Modeling cascading effects in collaborative systems: a formal risk interdependency framework

Purpose This paper introduces a formal risk interdependency framework to model cascading effects in collaborative systems. By characterizing risk causal chains and propagation chains, the framework aims to provide decision-makers with a structured tool to systematically identify, analyze, and prevent cascading risks in interconnected networks. Design/methodology/approach The framework, named the danger-risk-consequence chain, defines core components – danger, stake, risk, condition, and consequence – alongside their causal and propagation relationships, which form the basis for risk characterization. The framework is applied through a use case in the construction supply chain to demonstrate its capacity to model cascading risks. Findings The framework uncovers risk propagation chains that lead to cascading effects and formalizes the state evolution of these effects within collaborative systems. Through the use case, it demonstrates practical value by enabling stakeholders to visualize interrelated risks, detect vulnerabilities early, and implement targeted mitigation measures to enhance resilience against cascading disruptions. Originality/value This study presents a novel approach to modeling cascading effects by integrating risk causality and propagation into a formalized framework. In contrast to previous research, which offers static risk definitions for risk characterization, this framework contributes to risk management theory by providing a structured method for understanding and modeling interdependencies.