Risk Preferences of Informed Newsvendors

Zusammenfassung

People behave risk-averse in many situations where decisions are made under uncertainty (cf. Camerer 2000; Hillson and Murray-Webster 2005). However, in a commonly analyzed inventory model with demand uncertainty, the Newsvendor model (e.g., Khouja 1999; Nahmias 2008), most experimental research indicates that people are not risk-averse when making ordering decisions (e.g., Schweitzer and Cachon 2000).