A Meta‐Analysis of Newsvendor Experiments: Revisiting the Pull‐to‐Center Asymmetry. Issue 1 (9th July 2018)

• Record Type: Journal Article
• Authors: Zhang, Yinghao; Siemsen, Enno
• Is Part Of: Production and operations management. Volume 28:Issue 1(2019)
• Page Start: 140
• Page End: 156
• Publication Date: 2018-07-09
• Subjects: meta‐analysis -- behavioral operations -- newsvendor experiments -- pull‐to‐center -- asymmetry; Production management -- Periodicals; 658.505
• DOI: 10.1111/poms.12899
• Languages: English
• ISSNs: 1059-1478

Abstract

Abstract : The field of behavioral operations has produced a rich tradition of experiments in newsvendor decision‐making. Our study provides a meta‐analysis of 24 papers in this research area; we confirm that the pull‐to‐center (PtC) effect, where average order quantities in a sample lie in between average demand and optimal order quantities, is a very stable observable phenomenon across studies. However, we also show that the asymmetry in the PtC effect between high‐margin and low‐margin conditions varies significantly from study to study; factors that allow predicting the extent and direction of the PtC asymmetry include the likelihood of obtaining losses, the way underage costs are presented to subjects, and the existence of a decision support system. We validate these factors using a controlled experiment. In conclusion, the PtC asymmetry appears less as a fundamental attribute of human behavior, but rather as a function of the design aspects of the experiment.