Universität zu Köln

Becker-Peth, Michael ORCID: 0000-0002-4496-7702, Thonemann, Ulrich ORCID: 0000-0002-3507-9498 and Gully, Torsten (2018). A note on the risk aversion of informed newsvendors. J. Oper. Res. Soc., 69 (7). S. 1135 - 1146. ABINGDON: TAYLOR & FRANCIS LTD. ISSN 1476-9360

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Abstract

The order behaviour of newsvendors has been extensively analysed in the behavioural operations literature and a robust observation has been that average order quantities are between expected-profit-maximising quantities and mean demand. This pull-to-center effect has been explained by anchoring, demand-chasing, inventory error minimisation, and other decision heuristics and biases. Risk preferences have been ruled out as an explanation of order behaviour, which we believe might have been premature. Risk preferences vary between people and understanding the effect of risk preferences on ordering requires an analysis at the individual level and not only on the group level, which is the dominant approach used in the literature. In a controlled laboratory experiment, we measure individual risk preferences and analyse how they relate to order quantities. We find a significant correlation between individual risk preferences and order quantities, which indicates that risk preferences affect order behaviour. We also test how information about the effect of order quantities on the profit distribution affects ordering and find only a marginal moderation effect. Furthermore, our analyses show no mediation effect of risk preferences by gender, but a significant level effect of gender: female subjects anchor more on mean demand than male subjects.

Item Type:	Journal Article
Creators:	Creators Email ORCID ORCID Put Code Becker-Peth, Michael UNSPECIFIED orcid.org/0000-0002-4496-7702 UNSPECIFIED Thonemann, Ulrich UNSPECIFIED orcid.org/0000-0002-3507-9498 UNSPECIFIED Gully, Torsten UNSPECIFIED UNSPECIFIED UNSPECIFIED
URN:	urn:nbn:de:hbz:38-202762
DOI:	10.1080/01605682.2017.1390525
Journal or Publication Title:	J. Oper. Res. Soc.
Volume:	69
Number:	7
Page Range:	S. 1135 - 1146
Date:	2018
Publisher:	TAYLOR & FRANCIS LTD
Place of Publication:	ABINGDON
ISSN:	1476-9360
Language:	English
Faculty:	Faculty of Management, Economy and Social Sciences
Divisions:	Center of Excellence C-SEB
Subjects:	Economics
Uncontrolled Keywords:	Keywords Language DECISION-MAKING; GENDER-DIFFERENCES; DETERMINANTS; PREFERENCES; FEELINGS Multiple languages Management; Operations Research & Management Science Multiple languages
Refereed:	Yes
URI:	http://kups.ub.uni-koeln.de/id/eprint/20276