Analyzing learning effects in the newsvendor model by probabilistic methods

Jonas Andersson, Kurt Jörnsten, Jostein Lillestøl and Jan Ubøe

No 2019/13, Discussion Papers from Norwegian School of Economics, Department of Business and Management Science

Abstract: In this paper, we use probabilistic methods to analyze learning effects in a behavioral experiment on the newsvendor model. We argue why we should believe that suggested orders follow a multinomial logit distribution, and use the single parameter in that model to extract information on learning effects. We revisit the data, analyzed previously by Bolton et al. (2012), and show that our model predicts the pull-to-center effect in these experimental data very well.

Keywords: Behavioral OR; experimental economics; bounded rationality; probabilistic methods; pull-to-center effect (search for similar items in EconPapers)
JEL-codes: C00 C70 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2019-10-11
New Economics Papers: this item is included in nep-dcm, nep-exp and nep-ore
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:nhhfms:2019_013

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