Recent behavioral studies have demonstrated that decision makers may not always optimize their performance, and several modeling approaches have been proposed to explain this boundedly rational behavior. In this paper we model two forms of bounded rationality in a newsvendor setting: the...

This paper investigates the capacity investment decision of a supplier who solicits private forecast information from a manufacturer. To ensure abundant supply, the manufacturer has an incentive to inflate her forecast in a costless, non-binding, and non-verifiable type of communication known as...