Newsvendor Pull-to-Center Reconsidered

Lau, Nelson C.; Bearden, J. Neil; Hasija, Sameer

doi:10.2139/ssrn.1944147

Cited by 21 publications

(28 citation statements)

References 23 publications

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“…Lau et al (2014) also showed that how individuals do not tend to demonstrate PTC effect, which otherwise has been observed at the aggregate level. Operations and Supply Chain Management 11(4) pp.…”

Section: Discussion and Proposed Future Research Directionsmentioning

confidence: 86%

“…Lurie and Swaminathan (2009) also examined the impact of frequency of feedback on ordering decisions and found that beyond a certain range, feedback frequency may have a negative effect on player's performance. Lau et al (2014) examined the experimental data of Bolton and Katok (2008) and pointed out an important observation regarding PTC effect. They showed that while PTC effect is present in aggregate data, it does not sufficiently describe a population of individual decision makers and hence, does not account for heterogeneity in individual behavior.…”

Section: Figurementioning

confidence: 99%

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A Review of Behavioral Decision Making in the Newsvendor Problem

Sharma

Nandi

2018

OSCM: An Int. Journal

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Schweitzer and Cachon (2000) demonstrated that choices of decision-maker in the newsvendor problem setting systematically deviate from those that maximize their expected profit. Since then, a large body of empirical and theoretical studies has been published to describe the newsvendor decisionmaking behavior. To establish further, the purpose of this paper is twofold. First, it identifies the various behavioral theories and biases that explain the newsvendor behavior by employing a systematic literature review of peer-reviewed articles published in leading journals from 2000 to 2017. Second, it classifies and analyzes the identified literature from three dimensions of human behavior namely: individual decision making biases, social preferences, and cultural aspects. Our findings from the review show that research has primarily emphasized individual decision making biases while social and cultural aspects lack analysis and are worthy of investigation. Finally, we discuss some directions for future research, followed by the conclusion and limitations of this review.

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Section: Discussion and Proposed Future Research Directionsmentioning

confidence: 86%

Section: Figurementioning

confidence: 99%

A Review of Behavioral Decision Making in the Newsvendor Problem

Sharma

Nandi

2018

OSCM: An Int. Journal

View full text Add to dashboard Cite

show abstract

“…Bolton et al (2012) compared how experienced procurement managers and students solve the newsvendor problem and found that both the managers and students broadly exhibit the same kind of pull-to-center bias. Lau et al (2014) showed that the "pull-to-center" bias can not adequately describe the population of individual decision makers who are found to be highly heterogeneous, and discussed some methodological implications and future research about this direction.…”

Section: Literature Reviewmentioning

confidence: 99%

Optimal decisions for the loss-averse newsvendor problem under CVaR

Meng

Shen

et al. 2015

International Journal of Production Economics

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“…Therefore, the focus on this set of personal characteristics in the theoretical development of ASC would be an appropriate starting point. Recent BeOps literature has also noted personal characteristic assessment as a potentially important consideration in supply chain and operations management (Croson et al, 2013; Lau et al, 2014). For simplicity, we call this set of personal characteristics ‘ agent action‐influencing properties ’.…”

Section: Theoretical Developmentmentioning

confidence: 99%

Agent‐system co‐development in supply chain research: Propositions and demonstrative findings

Tangpong

Hung

2014

J of Ops Management

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a b s t r a c tIn this study, we develop an agent-system co-development (ASC) theoretical framework for behavioral research in supply chains. The ASC framework aims at explaining the dynamic agent-system relationships in supply chains whereby both action-influencing properties of human agents (e.g., beliefs, personalities, attitudes) and governance-influencing properties of supply chain systems (e.g., social norms, powerdependence, partnerial/adversarial relationship forms) mutually influence each other over time. Two empirical studies are conducted to illustrate how ASC can be a useful theoretical framework in supply chain research and to partially validate the central thesis of ASC in the contexts of partnerial/adversarial supply chain relationships and cooperative/competitive attitudes of human agents in supply chains. The results of both studies support the central thesis of ASC regarding the dynamic agent-system relationships. From two replicated experiments in Study 1, the results suggest that agents' cooperative and competitive attitudes in business relationships are altered as they are exposed to different supply chain conditions of partnerial and adversarial relationships. In addition, from the multi-method research efforts in Study 2, the results from two survey studies and an experiment are largely consistent with one another, suggesting that personnel turnovers in existing supply chain systems can eventually lead to changes in supply-chain-system properties including the degrees of long-term commitment, information sharing, and joint problem-solving between supply chain partners, as well as the frequency of opportunism occurrences in the supply chains. Finally, we propound that the dynamic agent-system relationships proposed in the ASC framework can be a useful analytical lens in viewing various supply chain issues, such as supply chain evolutions and changes, supply chain designs and personnel decisions, and self-reinforcing feedback loops and decision tendencies in supply chains.

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Newsvendor Pull-to-Center Reconsidered

Cited by 21 publications

References 23 publications

A Review of Behavioral Decision Making in the Newsvendor Problem

A Review of Behavioral Decision Making in the Newsvendor Problem

Optimal decisions for the loss-averse newsvendor problem under CVaR

Agent‐system co‐development in supply chain research: Propositions and demonstrative findings

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