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Managers and Students as Newsvendors: How Out-of-Task Experience Matters

27 Pages Posted: 11 Mar 2010  

Gary E. Bolton

Pennsylvania State University - Department of Supply Chain & Information Systems

Axel Ockenfels

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

Date Written: March 9, 2010

Abstract

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.

Suggested Citation

Bolton, Gary E. and Ockenfels, Axel and Thonemann, Ulrich W., Managers and Students as Newsvendors: How Out-of-Task Experience Matters (March 9, 2010). Available at SSRN: https://ssrn.com/abstract=1567610 or http://dx.doi.org/10.2139/ssrn.1567610

Gary Eugene Bolton

Pennsylvania State University - Department of Supply Chain & Information Systems ( email )

Dept. of Supply Chain & Information Systems
University Park, PA 16802-3306
United States
814-865-0611 (Phone)
814-863-2381 (Fax)

Axel Ockenfels

University of Cologne - Department of Economics ( email )

Albertus Magnus Platz
Cologne 50923
Germany

HOME PAGE: http://ockenfels.uni-koeln.de/

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Ulrich W. Thonemann (Contact Author)

University of Cologne - Faculty of Management, Economics and Social Sciences ( email )

Richard-Strauss-Str. 2
Cologne, D-50923
Germany

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