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Cognitive reflection and economic order quantity inventory management : an experimental investigation.

Pan, J. and Shachat, J. and Wei, S. (2020) 'Cognitive reflection and economic order quantity inventory management : an experimental investigation.', Managerial and decision economics., 41 (6). pp. 998-1009.


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.

Item Type:Article
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Publisher 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 This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for self-archiving.
Date accepted:25 February 2020
Date deposited:03 March 2020
Date of first online publication:03 April 2020
Date first made open access:03 April 2022

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