Researching The Newsvendor Behavior Based On Bounded Rationality From The Perspective Of Buyback Contract Behavioral Experiments

The classical newsvendor model assumes that decision maker is perfectly rational and aims to maximize its expected profit, and determine critical ratio and the optimal quantity based on that. This paper studied decision maker’s limited rationality deviation that may exhibit under the stochastic demand, the same CR and different whole price and buyback price, analyzed the impact of bounded rationality deviation on order behavior. Then analyzed the relationship between the adverse bias and newsvendor decision bias by theoretical derivation. Finally, behavioral experiments were used to validate the model, and relevant strategy to remove decision bias was proposed.Taking the buyback contract as an example, the experiment proved that retailers real order behavior does not conform to the maximize its expected profit theory, and t the anchoring and demand chasing theory does not explain the phenomenon, the retailer’s ordering behavior is influenced not only by the CR, but also by the buyback contract parameters. For this, this paper put forward mental accounting, the reference points theory, constructed retailers bounded rationality order behavior model. Through the experiment results of inventory decision-making behavior which based on the Microsoft Visual Studio software, the paper verifies the improved model of the retailers’ decision-making and the effectiveness of individual behavioral model for predicting the retailers’ ordering behavior is better than aggregate behavioral model and the newsvendor model.