This paper investigates a setting where the retailer invests costly effort to shape demand, such as reducing demand fluctuation through demand-control effort or increasing demand levels with demand-promotion effort. We explore the preference bias between these two effort types and examine the impact of such a bias on profit performance. The experimental findings reveal that actual effort investments exhibit a significant preference bias for promotion effort in the low-profit condition, while no significant preference bias is observed in the high-profit condition. This behavioral pattern can be captured by a reference-dependent behavioral model incorporating the retailer’s optimism level in the reference point. Additional analyses, such as robustness experiments and model extensions, provide further support for the promotion-effort bias in the low-profit condition. Our analysis presents a comprehensive understanding of demand-shaping effort preferences and extends the application of the reference-dependence framework. It provides insights for managers in identifying potential biases and mitigating profit loss in demand-shaping activities.