Normal view MARC view

Decision biases in revenue management: some behavioral evidence

Author: Bearden, J. Neil ; Murphy, Ryan O. ; Rapoport, AmnonINSEAD Area: Decision SciencesIn: M and SOM, vol. 10, no. 4, fall 2008 Language: EnglishDescription: p. 625-636.Type of document: INSEAD ArticleNote: Please ask us for this itemAbstract: We study a problem of selling a fixed number of perishable goods over a finite and known horizon. After presenting a procedure for computing optimal decision policies and some numerical results on a simple heuristic policy for the problem, we describe results from two experiments involving financially motivated subjects. The experiments reveal that decision makers employ policies of the same form of the optimal policy. However, they show systematic biases to demand too much when they have many units to sell and too little when they have few to sell, resulting in between 8% and 11% revenue losses. We also propose some new ways in which behavioural studies can complement theoretical work in pricing and revenue management.
Tags: No tags from this library for this title. Log in to add tags.
Item type Current location Call number Status Date due Barcode Item holds
INSEAD Article Europe Campus
Available BC008443
Total holds: 0

Ask Qualtrics

We study a problem of selling a fixed number of perishable goods over a finite and known horizon. After presenting a procedure for computing optimal decision policies and some numerical results on a simple heuristic policy for the problem, we describe results from two experiments involving financially motivated subjects. The experiments reveal that decision makers employ policies of the same form of the optimal policy. However, they show systematic biases to demand too much when they have many units to sell and too little when they have few to sell, resulting in between 8% and 11% revenue losses. We also propose some new ways in which behavioural studies can complement theoretical work in pricing and revenue management.

Digitized

There are no comments for this item.

Log in to your account to post a comment.
Koha 18.11 - INSEAD Catalogue
Home | Contact Us | What's Koha?