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The success of a supply chain is highly reliant on effective inventory and ordering decisions. This paper systematically reviews and analyzes the literature on inventory ordering decisions conducted using behavioral experiments to inform the state-of-the-art.

This paper presents the first systematic review of this literature. We systematically identify a body of 101 papers from an initial pool of over 12,000.

Extant literature and industry observations posit that decision makers often deviate from optimal ordering behavior prescribed by the quantitative models. Such deviations are often accompanied by excessive inventory costs and/or lost sales. Understanding how humans make inventory decisions is paramount to minimize the associated consequences. To address this, the field of behavioral operations management has produced a rich body of research on inventory decision-making using behavioral experiments. Our analysis identifies primary research clusters, summarizes key learnings and highlights opportunities for future research in this critical decision-making area.

The findings will have a significant impact on future research on behavioral inventory ordering decisions while informing practitioners to reach better ordering decisions.

Previous systematic reviews have explored behavioral operations broadly or its subdisciplines such as judgmental forecasting. This paper presents a systematic review that specifically investigates the state-of-the-art of inventory ordering decisions using behavioral experiments.

To address three issues of survey-based methods (i.e. the absence of behaviors, the reference inequivalence, and the lack of cross-cultural interaction), the purpose of this paper is to explore the potential of using the behavioral experiment method to collect cross-cultural data as well as the possibility of measuring culture with the experimental data. Moreover, challenges to this method and possible solutions are elaborated for intriguing further discussion on the use of behavioral experiments in international business/international management (IB/IM) research.

This paper illustrates the merits and downside of the proposed method with an ultimate-game experiment conducted in a behavioral laboratory. The procedure of designing, implementing, and analyzing the behavioral experiment is delineated in detail.

The exploratory findings show that the ultimate-game experiment may observe participants’ behaviors with comparable references and allow for cross-cultural interaction. The findings also suggest that the fairness-related cultural value may be calibrated with the horizontal and vertical convergence of cross-cultural behaviors (i.e. people’s deed), and this calibration may be strengthened by incorporating complementary methods such as a background survey to include people’s words.

The behavioral experiment method illustrated and discussed in this study contributes to the IB/IM literature by addressing three methodological issues that are not widely recognized in the IB/IM literature.

This chapter discusses the benefits, limitations, and challenges in developing research projects that integrate a combination of archival, behavioral, and qualitative research methods. By demonstrating the inherent strengths and weaknesses of using a single method in isolation, this chapter aims to broaden our understanding of why and how research that examines various issues from the different perspectives is richer than employing any single method and enhances our understanding of a given accounting phenomenon. This chapter also discusses how investigating an issue through multiple research methods can help researchers improve the generalizability of findings and present a panoramic view of a particular phenomenon.

Behavioral research in accounting deals with the behavior of accountants. As such, it uses accounting subjects. Accounting subjects are very difficult to come by because of the nature of the accounting environment. First, professional accountants operate in a pressured environment in which they have little or no time to participate in behavioral research. Second, professional accountants operate in an environment of high service charges and have little or no interest in participating in behavioral experiments free or for a token remuneration. Third, professional accountants are usually inaccessible because behavioral researchers have few or no opportunities for contacts within a CPA firm. Finally, professional accountants operate in the real world in which they perceive behavioral research as too abstract to have practical value for them to participate in. Given the difficulties in getting accounting subjects, behavioral researchers often lament that the pool of available accounting subjects is very small. As such, they cannot rely on conventional research strategies that assume, among other things, normal distribution and homogeneity of variances. In this paper, we suggest a broad range of research strategies including sampling, design, measurement, and analysis to deal specifically with a very small pool of available accounting subjects. We cite some prior behavioral accounting studies and refer to some statistic textbooks deemed best for the application of these research strategies. Our suggestions should benefit anyone doing behavioral research in accounting.

We discuss the following three themes on the use of field experiments to study economic development: (1) We summarize the arguments for and against using experiments to gather behavioral data in the field; (2) We argue and illustrate that field experiments can provide data on behavior that can be used in subsequent analyses of the effect of behavioral social capital on economic outcomes; and (3) We illustrate that field experiments can be used as a development tool on their own to teach communities about incentives and strategic interaction.

The traditional newsvendor model has focused on deriving the optimal order quantity that minimises the balance between stocking too much or too less number of products. However, the managers make inventory decisions based on intuitions and shortcuts, which may involve human errors and biases. The effect of cognitive biases and heuristics influencing the inventory ordering decisions in newsvendor settings is highlighted. The advancement of research associated to the newsvendor biases is reviewed to appreciate the behavioral aspects of the minds underlying this process.

The use of experimental and non-experimental methods to investigate the ordering behaviour of newsvendors is described and we present a framework of the existing literature and highlight the research gaps to point to future research possibilities and priorities.

The proposed framework gives a systematic approach to confirm the existence of a substantial scope of research opportunities and points to specific areas for further research. It synthesizes the existing results of behavioral newsvendor research and will act as a key reference paper. In addition, it will help the practitioners and software tool vendors to comprehend the behavioral perspective of newsvendor preferences and design strategies to mitigate this effect. The insights will be helpful for academicians, researchers and practitioners working in the areas of experimental economics, behavioral economics, behavioral operations, bounded rationality theory, newsvendor modelling and supply chain contracts.

A summary of literature in this evolving area of research is very scarce. Considering the impact of behavioral economics on managerial decisions in the contemporary world, it is highly important to have an educational summary which can act as a tool for the practitioners and researchers in the area of behavioral operations management.

The purpose of this paper is to investigate the behavioral tendencies of supply managers when they are faced with uncertainty in making multi-tier sourcing decisions.

This paper uses the literature on multi-tier supply chains and behavioral decision making to develop a theoretical framework for examining factors influencing a supply manager’s decision to retain control over sourcing in the multi-tier context. An experimental vignette methodology is used to gather data from 259 supply managers.

Results suggest that supply managers choose to exert less multi-tier control when they have high levels of interpersonal trust in the tier-1 supplier’s sales representative. This effect is accentuated by a high level of familiarity with potential lower-tier suppliers. Under high levels of familiarity with potential lower-tier suppliers, supply managers will exert greater levels of multi-tier sourcing control as the behavioral uncertainty of the tier-1 supplier increases.

Buying firms can enhance their understanding of supply managers’ multi-tier sourcing decision making and the potential biases associated with it. Suggestions for a more effective use of multi-tier sourcing are provided in the Discussion section.

Multi-tier sourcing is an increasingly important area of research, and this paper is the first to examine individual supply managers’ behavioral decision making in the multi-tier context. This paper also contributes to the outsourcing literature by investigating behavioral factors influencing the outsourcing of sourcing activities.

The purpose of this study is to test various hypotheses regarding if managers' voluntarily prefer honesty in self-reported managerial performance (HPR).

This study uses an experimental approach with a data set of 300 Ghanaian employees.

The results confirm that the current trend where employee contracts are underpinned by the classical agency theory (CAT) is problematic, ineffective and costly because it does not appropriately explain the observed behaviour of honesty and partial honesty in self-reported performance or the dishonesty in reporting performance when there is no financial reward to be gained by employees. Therefore MNCs may benefit from a consideration of wider and alternative perspectives. Additionally, stakeholders must consider a strategy of delaying performance-related bonuses (pay-offs) to improve HPR and avoid capping performance-related pay off with an arbitrary threshold. This is because the setting of arbitrary thresholds reduces the established relationship between effort and reward and introduces gaming into the managerial performance reporting process.

Unlike other prior studies that rely on students as surrogates for employees, this study uses actual employees to test the experimental constructs. Aside from the comparatively large data set, this study is the first exploration of the differential effects of national characteristics on HPR in Ghana.

Human lab experiments have become an established method in information systems research for investigating user behavior, perception and even neurophysiology. The purpose of this paper is to facilitate experimental research by providing a practical guide on how to implement and conduct lab experiments in the freely available experimental platform Brownie.

Laying the groundwork of the tutorial, the paper first provides a brief overview of common design considerations for lab experiments and a generic session framework. Building on the use case of the widely used trust game, the paper then covers the different stages involved in running an experimental session and maps the conceptual elements of the study design to the implementation of the experimental software.

The paper generates findings on how computerized lab experiments can be designed and implemented. Furthermore, it maps out the design considerations an experimenter may take into account when implementing an experiment and organizing it along a session structure (e.g. participant instructions, individual and group interaction, state and trait questionnaires).

The paper reduces barriers for researchers to engage in experiment implementation and replication by providing a step-by-step tutorial for the design and implementation of human lab experiments.

We develop an experimental setting where the assumptions and predictions of the garbage can model can be tested. A careful reconstruction of the original simulation model let us select parameters that leave room for potential variations in individual behavior. Our experimental design replicates these parameters and thereby facilitates comparison of human behavior with the original model. We find that the majority strategy of human subjects is consistent with the original model, but exhibits some behavioral diversity. Human subjects exhibit fluid diverse behaviors that improve coordination in the face of uncertainty, but hinder collective learning that can improve group performance.