Behavioral Ordering, Competition and Profits: An Experimental Investigation

• 成果类型: Article
• 署名作者: Quiroga, Bernardo F.; Moritz, Brent; Ovchinnikov, Anton
• 署名单位: Pontificia Universidad Catolica de Chile; Pennsylvania Commonwealth System of Higher Education (PCSHE); Pennsylvania State University; Pennsylvania State University - University Park; Queens University - Canada; INSEAD Business School
• 刊物名称: PRODUCTION AND OPERATIONS MANAGEMENT
• ISSN/ISSBN: 1059-1478
• DOI: 10.1111/poms.13032
• 发表日期: 2019
• 页码: 2242-2258
• 关键词: Behavioral Operations; Experimental economics; newsvendor; decision biases; inventory competition

摘要

We investigate the impact of behavioral ordering on profits under competition. Specifically, we use controlled laboratory experiments to evaluate the differences in profits between a behavioral competitor (where a human places orders), and a management science-driven competitor (where orders are placed according to one of several plausible policies based on existing literature and managerial practice). Unlike the full-information game-theoretic models that assume rational decision-makers, these policies mimic practical situations by using less information and do not assume that their human competitors make fully rational decisions. Most prior literature focuses on non-competitive settings, where behaviorally biased deviations from optimal order quantities result in small expected profit losses. In contrast, under competition, we find that human decision-makers receive a substantially lower profit than the equilibrium expected profit, even as their competitors receive substantially higher profit.