Chinese perspective on newsvendor bias: An exploratory note

Chinese and American decision makers demonstrated significantly different biases while making newsvendor decisions in a laboratory experiment that utilizes the open-ended verbal protocol analysis approach. Chinese subjects (i) asked more questions before reaching their decision, which suggests that they are more cautious when making a decision; (ii) were more frequently able to come up with a new number as their decision whereas the American decision makers tended to use one of the given numbers as their decision; (iii) were more cognizant of salvage values and as a result ordered more than the American decision makers. Due to the open-ended, time-consuming nature of our experiment, our subject pool was small and thus we present these results as exploratory in nature and discuss directions that are worth further study in future experiments.