IDEAS home Printed from https://ideas.repec.org/a/taf/tjorxx/v69y2018i4p541-555.html
   My bibliography  Save this article

On elicitation-method effect in game experiments: a competing newsvendor perspective

Author

Listed:
  • Yukun Zhao
  • Xiaobo Zhao

Abstract

To test the behavioral validity of the strategy method in a setting of operations management, we experimentally investigate competing newsvendor behavior under incomplete information with both the strategy method and the direct-response method. We observe that the ‘‘pull-to-center’’ effect exists only with low margin; mean order quantity with high margin does not significantly deviate from equilibrium prediction. We build a behavioral model based on overestimation and mean anchoring to explain competing newsvendor behavior. Estimates of the behavioral model confirm the existence of the behavioral biases. Meanwhile, order levels are not significantly different between the strategy method and the direct-response method. Hence, we suggest that the strategy method should lead to similar decisions in newsvendor settings compared to the direct-response method and may be adopted in most operations management settings associated to the newsvendor problem to improve the efficiency of experimental studies.

Suggested Citation

  • Yukun Zhao & Xiaobo Zhao, 2018. "On elicitation-method effect in game experiments: a competing newsvendor perspective," Journal of the Operational Research Society, Taylor & Francis Journals, vol. 69(4), pages 541-555, April.
    • Handle: RePEc:taf:tjorxx:v:69:y:2018:i:4:p:541-555
    DOI: 10.1057/s41274-017-0246-z
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1057/s41274-017-0246-z
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1057/s41274-017-0246-z?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:tjorxx:v:69:y:2018:i:4:p:541-555. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/tjor .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.