Joint Decision-Making of Order Policies and Advertising Cost for the Retailer with
This paper deals with the joint decision-making problem of advertising cost and order quantity for the retailer with loss-aversion under uncertain demand, and the corresponding joint decision-making model is built based on the loss-aversion utility function within prospect theory framework. The results indicate that both the optimal order quantity and advertising cost of the retailer with lossaversion are less than those of the risk neutral retailer, the theoretical explanation can be given to interpret the bias found in the empirical study. Through theoretical analysis, this paper also studies the influence of model parameters on the optimal order quantity and advertising cost.
loss-aversion advertising cost order policy
Dan Xiao Yongwu Zhou Qionglin Liao Luxing Liu
School of Business Administration South China University of Technology, Guangzhou, China
国际会议
香港·广州
英文
491-494
2010-07-25（万方平台首次上网日期，不代表论文的发表时间）