Prospect theory explains newsvendor behavior: : The role of reference points

• Autores: Xiaoyang Long, Javad Nasiry
• Localización: Management science: journal of the Institute for operations research and the management sciences, ISSN 0025-1909, Vol. 61, Nº. 12, 2015, págs. 3009-3012
• Idioma: inglés
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• Resumen

  • Current understanding in operations management is that prospect theory, as a theory of decision making under uncertainty, cannot systematically explain the ordering behavior observed in experiments on the newsvendor problem. We suggest this is because the newsvendor’s reference point is assumed to be the status quo, i.e., zero payoff. We propose an alternative based on newsvendor’s salient payoffs and show that prospect theory can, in fact, account for experimental results