دانلود رایگان مقاله بازبینی نظریه چشم انداز و مساله روزنامه فروش

abstract

Many experimental studies have demonstrated that human decision-makers exhibit the pull-to-center effect in newsvendor decision. It has been shown in the literature that prospect theory with a decisiondependent reference point can predict the pull-to-center effect for the newsvendor problem by assuming a uniform distribution of demand. In this paper, we prove this result for a general case: prospect theory with a decision-independent reference point can predict the pull-to-center effect for the newsvendor problem with a general distribution of demand.

4. Concluding remarks

In this paper, we analytically prove that prospect theory with a decision-independent reference point can predict the decision behavior in the newsvendor problem with general distributions of demand. Our model is a typical model of prospect theory, where all probabilities are used without weights, or equivalently, the model uses a linear weighting function for probabilities. A more general model of prospect theory is to use a nonlinear weighting function for probabilities [3,11]. Obviously, the prediction power of the model with a nonlinear weighting function for probabilities is stronger than the typical model, because the latter is a special one of the former. In this sense, prospect theory (no matter typical model or general model) is powerful in predicting the pull-tocenter effect for the problem of newsvendor decision.

A number of experiments have been conducted in the literature, most of which are based on the newsvendor setting with either a uniform or a normal distribution of demand. For different motivations, other distributions can be adopted, and decisionindependent reference points when making decisions might be more viable. Our work can be a bridge to connect the experimental study with the model analysis in research on predicting the pullto-center effect.