Formation Mechanism of Newsvendor Decision Bias Based on Loss Averse

Abstract

Abstract:

Based on loss averse model, this paper introduces stockout averse to modify the classic newsvendor model, and constructs newsvendor model with loss averse under stockout punishing. At the same time, the paper designs behavior experiments to verify the new model based on Microsoft VFP. As shown in the results, stockout penalty coefficient decreases with product profit. In highprofit product, decision maker with loss reverse will order more than the risk neutral decision maker. In lowprofit product, decision maker with loss reverse will order less than the risk neutral decision maker. However, the order quantity is equal within the balanceprofit product.

Key words: inventory decision behavior, loss averse, stockout averse, newsvendor model, newsvendor decision bias

CLC Number:

F 272.3

ZHUANG He1,ZHANG Guangyuan1,DING Xiaodong1,2 LU Gongyuan1,GONG Di1,HUANG Xiuli1. Formation Mechanism of Newsvendor Decision Bias Based on Loss Averse[J]. Journal of Shanghai Jiaotong University, 2017, 51(2): 237-.

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[1]	ZHANG Tao,GU Feng,TAN Yi. Supply Chain Coordination Strategies of Seasonal Goods Based on Time Competition [J]. Journal of Shanghai Jiaotong University, 2018, 52(7): 873-882.
[2]	ZHOU Jian-Heng-1, GAO Jie-2, GUAN Xian-Jun-3. Study on Financing Supply Chain Coordination Based on Strategic Customer [J]. Journal of Shanghai Jiaotong University, 2013, 47(03): 489-494.

Formation Mechanism of Newsvendor Decision Bias Based on Loss Averse

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