Kicking the "mean" habit: joint prepositioning in debiasing pull-to-center effects

Behavioral studies of the newsvendor model have revealed systematic underordering for low-cost products and overordering for high-cost products. This systematic deviation from optimal ordering is known as the pull-to-center effect. This chapter proposes a joint newsvendor framework or portfolio that bundles two products of different importance as a strategy to influence pull-to-center behavior. A high-cost, high-importance product is bundled with a low-cost, low-importance product, exposing decision-makers to an inconsistent cost-importance ordering task. In contrast, a low-cost, high-importance product is bundled with a high-cost, low-importance product, exposing decision-makers to a consistent cost-importance ordering task. In both cases, the high-importance product should be more salient relative to the low-importance product, thus inducing larger orders for the high-importance product compared to isolated orders associated with the same product. The framework is tested in a decision-making game portraying an inventory prepositioning task in preparation to emergency response. The prospects for debiasing in these contexts are addressed.

• Fecha de publicación: 2015
• Institución: Universidad del Rosario
• Repositorio: Repositorio EdocUR - U. Rosario
• Idioma: eng
• OAI Identifier: oai:repository.urosario.edu.co:10336/28895
• Acceso en línea: https://doi.org/10.1093/acprof:oso/9780199357215.003.0012; https://repository.urosario.edu.co/handle/10336/28895
• Palabra clave: Debiasing; Inventory prepositioning; Newsvendor; Portfolio; Pull-to-center effect
• License: Restringido (Acceso a grupos específicos)