We investigate learning-by-doing in the newsvendor inventory problem. An earlier study observed that decision makers tend to anchor orders away from the expected profit maximizing order. We study enhancements to the learning environment suggested by the behavioral literature. Extended experience...

One of the main assumptions in research on designing supply contracts is that decision makers act in a way that maximizes their expected profit. A number of laboratory experiments demonstrated that this assumption does not hold – specifically, faced with uncertain demand, decision-makers place...