TY - JOUR
T1 - Firms can benefit from inaccurate market beliefs
AU - Qiu, Qijun
AU - Jiang, Li
N1 - Funding Information:
The authors are grateful to Professor Mahesh Nagarajan, an associate editor and two anonymous referees for their comments and guidance that have significantly improved the presentation and content of the paper. This research is supported in part by National Natural Science Foundation of China (Grant # 72001115) , Natural Science Foundation of the Jiangsu Higher Education Institutions of China (Grant # 20KJB410006) , Humanities and Social Sciences Foundation of Ministry of Education of China (Grant # 20YJC630041) , and Startup Foundation for Introducing Talent of NUIST, China (Grant # 2019r067 ).
Publisher Copyright:
© 2020 Elsevier B.V.
PY - 2021/1
Y1 - 2021/1
N2 - A supplier sells to a retailer who serves a market with uncertain demand. Before the season starts, the retailer preorders from the supplier, who stocks to satisfy at least the preorder. After the actual demand is realized, the retailer can place an at-once order, which is satisfied up to stock availability. Market demand, as perceived by a firm, can differ from what it actually is. We find that a firm can benefit from holding an inaccurate market belief.
AB - A supplier sells to a retailer who serves a market with uncertain demand. Before the season starts, the retailer preorders from the supplier, who stocks to satisfy at least the preorder. After the actual demand is realized, the retailer can place an at-once order, which is satisfied up to stock availability. Market demand, as perceived by a firm, can differ from what it actually is. We find that a firm can benefit from holding an inaccurate market belief.
KW - Contracting arrangement
KW - Market belief
KW - Newsvendor
UR - http://www.scopus.com/inward/record.url?scp=85098112286&partnerID=8YFLogxK
U2 - 10.1016/j.orl.2020.12.006
DO - 10.1016/j.orl.2020.12.006
M3 - Journal article
AN - SCOPUS:85098112286
SN - 0167-6377
VL - 49
SP - 150
EP - 156
JO - Operations Research Letters
JF - Operations Research Letters
IS - 1
ER -