Managers and Students as Newsvendors: How Out-of-Task Experience Matters
Gary E. Bolton
Pennsylvania State University - Department of Supply Chain & Information Systems
University of Cologne - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)
Ulrich W. Thonemann
University of Cologne - Faculty of Management, Economics and Social Sciences
March 9, 2010
We compare how freshmen business students, graduate business students and experienced procurement managers perform on a simple inventory ordering task.
We find that, qualitatively, managers exhibit ordering behavior similar to students, including biased ordering towards average demand. Experience, however, affects subjects’ utilization of information. The managers’ work experience seems most valuable when there is only historical demand data to guide decision making, while students better utilize analytical information and task training. As a result, when information necessary to solve the problem to optimality is added to historical information, students catch up to the managers, and students with classroom experience in operations management outperform managers.
Number of Pages in PDF File: 27
Date posted: March 11, 2010