Journal article
Behavioral Ordering, Competition and Profits: An Experimental Investigation
Production and operations management, Vol.28(9), pp.2242-2258
09/2019
DOI: 10.1111/poms.13032
Abstract
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.
Details
- Title: Subtitle
- Behavioral Ordering, Competition and Profits: An Experimental Investigation
- Creators
- Bernardo F. Quiroga - Pontificia Universidad Católica de ChileBrent Moritz - Pennsylvania State UniversityAnton Ovchinnikov - Queens University
- Resource Type
- Journal article
- Publication Details
- Production and operations management, Vol.28(9), pp.2242-2258
- DOI
- 10.1111/poms.13032
- ISSN
- 1059-1478
- eISSN
- 1937-5956
- Publisher
- Wiley
- Number of pages
- 17
- Grant note
- Pennsylvania State University's Smeal College of Business
- Language
- English
- Date published
- 09/2019
- Academic Unit
- Business Analytics
- Record Identifier
- 9985219852602771
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