Managers and Students as Newsvendors

Authors:
Gary E. Bolton;Axel Ockenfels;Ulrich W. Thonemann
Affiliations:
Jindal School of Management, University of Texas at Dallas, Richardson, Texas 75080/ and Smeal College of Business, Pennsylvania State University, University Park, Pennsylvania 16802;Department of Economics, University of Cologne, D-50923 Cologne, Germany;Department of Business Administration, University of Cologne, D-50923 Cologne, Germany
Venue:
Management Science
Year:
2012

Citing 3
Cited 0

Decision Bias in the Newsvendor Problem with a Known Demand Distribution: Experimental Evidence

Management Science
Learning by Doing in the Newsvendor Problem: A Laboratory Investigation of the Role of Experience and Feedback

Manufacturing & Service Operations Management
Do Random Errors Explain Newsvendor Behavior?

Manufacturing & Service Operations Management

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Abstract

We compare how experienced procurement managers and students solve the newsvendor problem. We find that managers broadly exhibit the same kind of pull-to-center bias as students do. Also, managers use information and task training no better than students. The performance of managers is positively affected by the level of their education and their level in the organizational hierarchy. We discuss implications for theory and for how ordering might be improved in practice. This paper was accepted by Teck Ho, decision analysis.