Research On Ordering And Pricing Decisions Of Overconfident Retailer

Overconfident preference is one of the most important factors in influencing policymakers making decision.This thesis mainly explores the effects of overconfident preference on the retailer' decisions,and analyzes the impact of these decisions on supply chain and the corresponding coordination measures and so on.The main study contents are as follows:Firstly,we briefly introduce the background and the research significance of overconfidence,and have a review on the inventory decision problems of the rational and overconfident retailers,behavioral supply chain,retailing competition and supply chain coordination,which are related with this thesis.Secondly,we research the influence of the overconfident preference on the retailer's ordering decision under demand certainty.We start with a benchmark model on the rational newsvendor model,and investigate the retailer's optimal ordering decision and expected profit.Next,we extend the benchmark model and introduced an overconfident retailer.We analyze the difference in their ordering decisions and profits.It is found that the retailer's overconfident preference does not necessarily damage the supply chain compared with the benchmark model when the overconfident level doesn't exceed a threshold.We also design the cooperation and buyback mechanism and conduct numerical analysis to compare the manufacturer and retailer's expected profits and real profits with that in the basic newsvendor model.It can achieve Pareto improvement in the supply chain when the overconfident level is not high.However,when the retailer's overconfident level exceeds a threshold,the retailer's ordering decision can't make the whole supply chain achieve sustainable development.Thirdly,we research the influence of the overconfident preference on the retailer's pricing and ordering decision when demand is uncertain and affected by price.We consider a two-echelon supply chain which is composed of one rational manufacturer and one overconfident retailer.We take the supply chain composed of a rational manufacturer and a rational retailer as the benchmark model,analyze the difference in the optimal price and order quantity decisions between the rational and overconfident retailer,and analyze the effect of overconfident level on the optimal pricing and order decisions and the expected profits by means of building a mathematical model and conducting numerical method.It is found that the higher the overconfident level is,the higher selling price the overconfident retailer charges.Moreover,the retailer's overconfident preference does not necessarily damage the supply chain performance.Finally,we research the impact of the retailer's overconfident preference on the competed retailers' decisions under demand uncertainty in a duopolistic market.We consider a two-echelon supply chain which is composed of one rational manufacturer produce and one overconfident retailer and one rational retailer.According to the overconfident characteristic and game mode,we aim to investigate two cases:(1)the rational retailer knows that the other retailer has overconfident preference;(2)the rational retailer doesn't know the other retailer's overconfident preference.We analyze the two retailers' decision processes in a Nash game and derive their optimal decisions,and then further discuss a Stackelberg-like game for extension.A numerical analysis is conducted to examine the impact of overconfident preference on the optimal pricing,ordering decisions and expected profits.It is found that the higher the overconfident level is,the higher selling price that the overconfident retailer charges.Moreover,the overconfident preference does not necessarily damage the supply chain performance.