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Cognitive reflection and economic order quantity inventory management: An experimental investigation

Pan, J.; Shachat, J.; Wei, S.

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Abstract

We use laboratory experiments to evaluate the effects of individuals' cognitive abilities on their behavior in a finite horizon economic order quantity model. Participants' abilities to balance intuitive judgment with cognitive deliberations are measured by the cognitive reflection test (CRT). Participants then complete a sequence of ordering decisions. Our results show that participants with higher CRT scores on average earn greater profit and choose more effective policies. However, these gaps are transitory as participants with lower CRT scores exhibit faster learning. We also show gender differences in performance do not hold when we control for individual CRT scores.

Citation

Pan, J., Shachat, J., & Wei, S. (2020). Cognitive reflection and economic order quantity inventory management: An experimental investigation. Managerial and Decision Economics, 41(6), 998-1009. https://doi.org/10.1002/mde.3154

Journal Article Type Article
Acceptance Date Feb 25, 2020
Online Publication Date Apr 3, 2020
Publication Date 2020-09
Deposit Date Mar 2, 2020
Publicly Available Date Mar 28, 2024
Journal Managerial and Decision Economics
Print ISSN 0143-6570
Electronic ISSN 1099-1468
Publisher Wiley
Peer Reviewed Peer Reviewed
Volume 41
Issue 6
Pages 998-1009
DOI https://doi.org/10.1002/mde.3154
Public URL https://durham-repository.worktribe.com/output/1306766

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Copyright Statement
This is the accepted version of the following article: Pan,J., Shachat,J. & Wei,S. (2020). Cognitive reflection and economic order quantity inventory management: An experimental investigation. Managerial and Decision Economics 41(6): 998-1009 which has been published in final form at https://doi.org/10.1002/mde.3154. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for self-archiving.





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