7th North American International Conference on Industrial Engineering and Operations Management

Effect of Personality on Newsvendor Decisions

Ummuhan Akbay & Murat Kaya
Publisher: IEOM Society International
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Track: Inventory Management
Abstract

We present the results of a newsvendor experiment and out-of-experiment personality trait surveys. Our study is based on a simple scenario where the decision maker determines the stock quantity for a perishable product with stochastic consumer demand. We explore the predictive power of self-esteem and regret tendency on ordering behavior in newsvendor setting. We find that subjects with higher self-esteem scores place larger orders and earn more profit under low purchasing cost setting, whereas the difference is not salient under high purchasing cost setting. Moreover, decision-makers with higher regret tendency place orders with smaller variability and closer to the demand mean under high purchasing cost setting.

Published in: 7th North American International Conference on Industrial Engineering and Operations Management, Orlando, USA

Publisher: IEOM Society International
Date of Conference: June 11-14, 2022

ISBN: 978-1-7923-9158-3
ISSN/E-ISSN: 2169-8767