One striking behavioral phenomenon is the “pull-to-center” bias in the newsvendor game: facing stochastic demand, subjects tend to order quantities between the expected profit maximizing quantity and mean demand. We show that the impulse balance equilibrium, which is based on a simple...

In this paper, we address the question of how the assessment of costs influences decisions in a newsvendor setting. We expect that different cost types lead to different behavior. In our investigation, we consider a newsvendor problem with opportunity costs and a newsvendor problem with penalty...