Newsvendor Models with Alternative Risk Preferences Within Expected Utility Theory and Prospect Theory Frameworks

Charles Wang, Scott Webster () and Sidong Zhang ()
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Scott Webster: Syracuse University
Sidong Zhang: Tongji University

Chapter Chapter 7 in Handbook of Newsvendor Problems, 2012, pp 177-196 from Springer

Abstract: Abstract Newsvendor models are widely used in the literature, and usually based upon the assumption of risk neutrality. Recently there is a growing body of literature that attempts to use alternative risk preferences rather than risk neutrality to describe the newsvendor decision-making behavior. In this chapter, we provide an overview of newsvendor models with alternative risk preferences within the expected utility theory and prospect theory frameworks and identify some directions for future research.

Keywords: Expected utility theory; Prospect theory; Risk aversion; Loss aversion; Newsvendor model; Behavioral operations management (search for similar items in EconPapers)
Date: 2012
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DOI: 10.1007/978-1-4614-3600-3_7

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