Overconfidence is one of the most consistent, powerful, and widespread cognitive biases affecting decision making in situations characterized by random outcomes. In this paper, we study the effects and implications of overconfidence in a competitive newsvendor setting. In this context,...

In this paper, we study a firm's dynamic pricing problem in the presence of unknown and time-varying heterogeneity in customers' preferences for quality. The firm offers a standard product as well as a premium product to deal with this heterogeneity. First, we consider a benchmark case in which...

We incorporate the cry-wolf syndrome into a setting in which a manufacturer commissions a forecaster for recommendation. In this context, we define cry-wolf as a behavioral syndrome that leads the manufacturer to become less compliant with the forecaster's valuable recommendation after the...