The overconfident and optimistic price-setting newsvendor

Kirshner, Samuel N.; Shao, Lusheng

doi:10.1016/j.ejor.2019.02.023

Cited by 48 publications

(30 citation statements)

References 22 publications

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“…Recently, the price-setting newsvendor problem with multiple criteria was considered in [36][37][38][39][40][41][42][43][44]. The price-setting newsvendor problem with the mean-variance analysis used in the objective function was carried out in [36,37].…”

Section: Price-setting Newsvendor Problemmentioning

confidence: 99%

“…Yu et al [41] explored the price-setting newsvendor model, which involves a manufacturer with random yield and a retailer with uncertain demand using stochastic comparisons. Kirshner and Shao [42] studied optimism and overconfidence of a newsvendor modelled as weights on demand and profit. They used the prospect theory to show that optimism increases inventory.…”

Section: Price-setting Newsvendor Problemmentioning

confidence: 99%

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Bartering: Price-Setting Newsvendor Problem with Barter Exchange

Bieniek

2021

Sustainability

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Barter exchange is a system of swapping goods or services for other goods or services in a moneyless and direct manner. Barter has become an effective model of a circular economy because it reduces the consumption impact. Bartering maximizes the utility of assets and existing resources, and can unleash the unspent social, economic, and environmental value of underutilized assets. The present article analyzes the price-setting newsvendor problem with a barter exchange option. The retailer facing a stochastic price-dependent demand sells a product on the market and, additionally, needs another product for its own purposes. Therefore, first, the retailer trades the unsold product for the product it needs by means of barter, and next disposes of the unsold product at a discounted price at the end of the selling season. The retailer’s optimal order quantity and optimal price are derived assuming additive uncertainty in demand. This type of demand function has special characteristics, for example, the actual demand may attain negative values in times of economic uncertainty. The possibility of negative demand realizations is taken into consideration in the study. It proves that, in certain cases, the optimal solution belongs to the set of high barter prices which implies that the actual demand may be negative.

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Section: Price-setting Newsvendor Problemmentioning

confidence: 99%

Section: Price-setting Newsvendor Problemmentioning

confidence: 99%

Bartering: Price-Setting Newsvendor Problem with Barter Exchange

Bieniek

2021

Sustainability

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“…First, the results contribute to the efforts of estimating the underlying parameters associated with the newsvendor model (e.g., Gaynor and Anderson (1995), Fisher and Raman (1996), Olivares et al (2008)) by providing robust predictions that can serve as additional moments in estimation. The results also contribute to the literatures exploring how either (i) partial information of the demand distribution (Andersson et al (2013), O'Neil et al (2016, Natarajan et al (2017), Ninh et al (2019)), or (ii) alternative risk preferences/behavioral biases of the newsvendor (Eeckhoudt et al (1995), Herweg (2013), Kirshner and Shao (2019)) affect the traditional analysis. The results presented here indicate that ranking uncertainty using the dispersive order is likely to complement the efforts of generating robust predictions in other information/behavioral settings.…”

Section: Introductionmentioning

confidence: 68%

On demand uncertainty in the newsvendor model

Butters

2019

Economics Letters

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“…Ekin et al [23] developed a computationally efficient simulation method for discrete stochastic optimisation problems for the endogenous uncertainty supplier problem. Kirshner and Shao [24] combined prospect theory to develop a model of supplier ordering decisions that consider overconfidence and optimism. e results showed that greater optimism, overconfidence, and regret typically lead to lower profitability and increased inventory.…”

Section: Literature Reviewsmentioning

confidence: 99%

A Risk-Averse Newsvendor Model under Stochastic Market Price

Zhang

2021

Discrete Dynamics in Nature and Society

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The optimal inventory control is closely related to an enterprise’s operational efficiency, survival, and development. Market price uncertainty is introduced into the newsvendor model and the uncertainty’s impact on the firm's optimal stocking quantity is discussed. The results show that the impact of stochastic market price on the optimal stocking quantity under a given condition mainly depends on the magnitude of inventory cost. When the inventory cost is low, the market price’s uncertainty leads the firm to increase the stocking quantity. In contrast, when the inventory cost is high, market price uncertainty leads the firm to decrease inventory. Besides, the risk-averse behaviour leads the firm to reduce its stocking quantity.

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The overconfident and optimistic price-setting newsvendor

Cited by 48 publications

References 22 publications

Bartering: Price-Setting Newsvendor Problem with Barter Exchange

Bartering: Price-Setting Newsvendor Problem with Barter Exchange

On demand uncertainty in the newsvendor model

A Risk-Averse Newsvendor Model under Stochastic Market Price

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