We study the effects of demand uncertainty on optimal decisions and the expected profit of a price-setting newsvendor who faces either additive or multiplicative stochastic demand. Our key findings are as follows. (1) A stochastically larger demand may even lead to a smaller order size and a...

This paper considers returns policies under which consumers’ valuation depends on the refund amount they receive and the length of time they must wait after the item is returned. Consumers face an uncertain valuation before purchase, and the realization of that purchase's value occurs only...