Newsvendor Selling to Loss-Averse Consumers with Stochastic Reference Points

doi:10.1287/msom.2015.0532

CORC > 上海财经大学 > 上海财经大学

	Newsvendor Selling to Loss-Averse Consumers with Stochastic Reference Points
	Baron, Opher 1; Hu, Ming 1; Najafi-Asadolahi, Sami 2; Qian, Qu 3,4
刊名	M&SOM-MANUFACTURING & SERVICE OPERATIONS MANAGEMENT
	2015-09
卷号	17 期号:4 页码:456-469
关键词	newsvendor behavioral operations loss aversion contingent pricing marketing promotion stochastic reference points
ISSN号	1523-4614
DOI	10.1287/msom.2015.0532
英文摘要	We study a newsvendor who sells a perishable asset over repeated periods to consumers with a given consumption valuation for the product. The market size in each period is random, following a stationary distribution. Consumers are loss averse with stochastic reference points that represent their beliefs about possible price and product availability. Given the distribution of reference points, they choose purchase plans to maximize their expected total utility, including gain-loss utility, before visiting the store, and follow the plans in the store. In anticipation of consumers' purchase plans, in each period, before demand uncertainty resolves, the firm chooses an initial order quantity. After the uncertainty resolves, the firm chooses a contingent price depending on the demand realization, with the option of clearing inventory by charging a sale price, and otherwise, posting a full price. Over repeated periods, the interaction of the firm's operational decisions about ordering and contingent pricing and the consumers' purchase actions results in a distribution of reference points, and, in equilibrium, this distribution is consistent with consumers' beliefs. Under this framework of endogenized reference points, we fully characterize the firm's optimal inventory and contingent pricing policies. We identify conditions under which the firm's expected price and profit are increasing in the consumer loss aversion level. We also show that the firm can prefer demand variability over no-demand uncertainty. We obtain a set of insights into how consumers' loss aversion affects the firm's optimal operational policies that are in stark contrast to those obtained in classic newsvendor models. As examples, the optimal full price increases in the initial order quantity; and the optimal full price decreases, while the optimal sales frequency increases, in the procurement cost.
WOS研究方向	Business & Economics ; Operations Research & Management Science
语种	英语
出版者	INFORMS
WOS记录号	WOS:000366055400003
内容类型	期刊论文
源URL	[http://10.2.47.112/handle/2XS4QKH4/1476]
专题	上海财经大学
通讯作者	Baron, Opher
作者单位	1.Univ Toronto, Rotman Sch Management, Toronto, ON M5S 3E6, Canada; 2.Santa Clara Univ, Leavey Sch Business, Santa Clara, CA 95053 USA; 3.SIM Univ, Sch Business, Singapore 599491, Singapore; 4.Shanghai Univ Finance & Econ, Sch Int Business Adm, Shanghai 200433, Peoples R China
推荐引用方式 GB/T 7714	Baron, Opher,Hu, Ming,Najafi-Asadolahi, Sami,et al. Newsvendor Selling to Loss-Averse Consumers with Stochastic Reference Points[J]. M&SOM-MANUFACTURING & SERVICE OPERATIONS MANAGEMENT,2015,17(4):456-469.
APA	Baron, Opher,Hu, Ming,Najafi-Asadolahi, Sami,&Qian, Qu.(2015).Newsvendor Selling to Loss-Averse Consumers with Stochastic Reference Points.M&SOM-MANUFACTURING & SERVICE OPERATIONS MANAGEMENT,17(4),456-469.
MLA	Baron, Opher,et al."Newsvendor Selling to Loss-Averse Consumers with Stochastic Reference Points".M&SOM-MANUFACTURING & SERVICE OPERATIONS MANAGEMENT 17.4(2015):456-469.