We approach the newsvendor with pricing problem as a practitioner who must model demand as a function of price. Previous work required strong assumptions about demand curves, making practical implementation of results problematical. Instead, we assume that customers have reservation prices which...

We approach the newsvendor with pricing problem as a practitioner who must model demand as a function of price. Previous work required strong assumptions about demand curves, making practical implementation of results problematical. Instead, we assume that customers have reservation prices which...

This research aims at establishing a connection between the theory and practice of retail revenue management by designing a decision support system based on the experience acquired from several applied research projects at various retailers. With this system, users are expected to be able to...

Hammond (1996) argued that much of the research in the field of judgment and decision making (JDM) can be categorized as focused on either coherence or correspondence (C\&C) and that, in order to understand the findings of the field, one needs to understand the differences between these two...

The origin of prospect theory is the desire to test the intuitive statistician in the real world. The development of this theory by the cognitive psychologists Kahneman and Tversky can be traced to the formers work in cognitive psychophysics, in which deviations from average behavior are termed...

Certainty equivalence (CE) and probability equivalence (PE) methods are the two most frequently used procedures for constructing von Neumann-Morgenstern utility functions. In this paper, we compare these methods experimentally, using a two-stage within-subject design. By asking subjects first...

One of the fundamental postulates of rational choice is that preferences manifested by an individual towards alternatives should only depend on the merits of these alternatives and not on extraneous, irrelevant factors. Violations of this basic principle, so-called preference reversals, have...

Averaging estimates is an effective way to improve accuracy when combining expert judgments, integrating group members' judgments, or using advice to modify personal judgments. If the estimates of two judges ever fall on different sides of the truth, which we term bracketing, averaging must...

The process by which individuals learn from feedback when making recurrent choices among ambiguous alternatives is explored. We describe an experiment in which subjects solve a variant of the classic armed-bandit problem of dynamic decision theory, set in the context of airline choice. Subjects...