The expectation-based loss-averse newsvendor

Fabian Herweg ()

Economics Letters, 2013, vol. 120, issue 3, 429-432

Abstract: We modify the classic single-period inventory management problem by assuming that the newsvendor is expectation-based loss averse according to Kőszegi and Rabin (2006, 2007). We show that the expectation-based loss-averse newsvendor orders less than the profit-maximizing quantity. Moreover, the order placed by the expectation-based loss-averse newsvendor features plausible comparative statics of cost and price changes.

Keywords: Behavioral operations management; Inventory decision; Loss aversion; Newsvendor (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (29)

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Working Paper: The expectation-based loss-averse newsvendor (2013)
Working Paper: The Expectation-Based Loss-Averse Newsvendor (2012)
Working Paper: The Expectation-Based Loss-Averse Newsvendor (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:120:y:2013:i:3:p:429-432

DOI: 10.1016/j.econlet.2013.05.035

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