Managers and Students as Newsvendors - How Out-of-Task Experience Matters

Gary Bolton (), Axel Ockenfels and Ulrich Thonemann

No 39, Working Paper Series in Economics from University of Cologne, Department of Economics

Abstract: We compare how freshmen business students, graduate business students and experienced procurement managers perform on a simple inventory ordering task. We find that, qualitatively, managers exhibit ordering behavior similar to students, including biased ordering towards average demand. Experience, however, affects subjects’ utilization of information. The managers’ work experience seems most valuable when there is only historical demand data to guide decision making, while students better utilize analytical information and task training. As a result, when information necessary to solve the problem to optimality is added to historical information, students catch up to the managers, and students with classroom experience in operations management outperform managers.

Date: 2008-08-25
New Economics Papers: this item is included in nep-cbe and nep-exp
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Citations: View citations in EconPapers (7)

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