Coping with Loss Aversion in the Newsvendor Model

<div>Optimal order quantities <svg height="13.5581pt" id="M208" style="vertical-align:-3.3251pt" version="1.1" viewbox="-0.0498162 -10.233 12.69 13.5581" width="12.69pt" xmlns="http://www.w3.org/2000/svg" xmlns:xlink="http://www.w3.org/1999/xlink"><g transform="matrix(.013,0,0,-0.013,0,0)"><path d="M481 430L460 436C440 442 393 451 366 451C348 451 325 448 313 446C267 437 195 409 147 367C79 308 24 211 24 105C24 37 56 -12 93 -12C121 -12 156 1 199 32C246 66 313 122 349 168H351L286 -147C274 -205 261 -215 210 -224L199 -226L193 -255L438 -243L442 -214L417 -212C364 -208 359 -200 370 -140L433 204C455 324 469 389 481 430ZM391 385C382 336 366 260 358 238C321 178 209 59 143 59C129 59 115 83 115 131C115 207 152 317 220 373C243 392 282 403 314 403C348 403 374 395 391 385Z" id="g50-114"></path><glyph.data ascent="3443" descent="-2856" horiz-adv-x="499" vert-adv-y="499"></glyph.data></g><g transform="matrix(.0091,0,0,-0.0091,6.487,-5.872)"><path d="M486 158C486 177 478 202 466 220C413 228 386 236 336 262C386 288 413 297 466 304C478 323 486 347 485 366C470 376 444 381 422 380C389 338 368 319 321 288C323 345 329 372 349 422C339 442 322 461 305 470C289 461 271 442 262 422C281 372 287 345 290 288C243 319 222 338 189 380C167 381 142 376 125 366C125 347 133 322 145 304C198 296 225 288 275 262C225 236 198 227 145 220C133 201 125 177 126 158C141 148 167 143 189 144C222 186 243 205 290 236C288 179 282 152 262 102C272 82 289 63 306 54C322 63 340 82 350 102C330 152 324 179 321 236C368 205 390 186 422 144C444 143 470 148 486 158Z" id="g50-43"></path><glyph.data ascent="3443" descent="-2856" horiz-adv-x="611" vert-adv-y="611"></glyph.data></g></svg> and <svg height="13.4119pt" id="M209" style="vertical-align:-3.325pt" version="1.1" viewbox="-0.0498162 -10.0869 12.4251 13.4119" width="12.4251pt" xmlns="http://www.w3.org/2000/svg" xmlns:xlink="http://www.w3.org/1999/xlink"><g transform="matrix(.013,0,0,-0.013,0,0)"><path d="M481 430L460 436C440 442 393 451 366 451C348 451 325 448 313 446C267 437 195 409 147 367C79 308 24 211 24 105C24 37 56 -12 93 -12C121 -12 156 1 199 32C246 66 313 122 349 168H351L286 -147C274 -205 261 -215 210 -224L199 -226L193 -255L438 -243L442 -214L417 -212C364 -208 359 -200 370 -140L433 204C455 324 469 389 481 430ZM391 385C382 336 366 260 358 238C321 178 209 59 143 59C129 59 115 83 115 131C115 207 152 317 220 373C243 392 282 403 314 403C348 403 374 395 391 385Z" id="g50-114"></path><glyph.data ascent="3443" descent="-2856" horiz-adv-x="499" vert-adv-y="499"></glyph.data></g><g transform="matrix(.0091,0,0,-0.0091,6.487,-5.872)"><path d="M558 106L533 129C501 84 476 67 464 67C446 67 435 116 414 239C457 297 508 367 550 440L539 451L484 438C458 390 429 338 404 300H402C375 407 351 451 285 451C168 451 24 312 24 153C24 56 66 -12 132 -12C206 -12 284 64 345 156H347C367 24 386 -12 422 -12C457 -12 503 7 558 106ZM338 206C272 99 215 56 173 56C140 56 116 96 116 170C116 303 194 405 255 405C304 405 324 299 338 206Z" id="g50-223"></path><glyph.data ascent="3443" descent="-2856" horiz-adv-x="582" vert-adv-y="582"></glyph.data></g></svg> with different value of <svg height="9.49473pt" id="M210" style="vertical-align:-0.2063999pt" version="1.1" viewbox="-0.0498162 -9.28833 7.55047 9.49473" width="7.55047pt" xmlns="http://www.w3.org/2000/svg" xmlns:xlink="http://www.w3.org/1999/xlink"><g transform="matrix(.013,0,0,-0.013,0,0)"><path d="M547 100L523 123C489 76 461 62 452 62C442 62 433 71 427 109C405 243 387 408 378 495C360 666 322 710 263 710C230 710 182 688 161 667L170 639C184 646 203 651 218 651C247 651 272 634 288 562C297 521 300 485 304 436C230 267 111 104 24 11L33 -12L116 6C163 73 263 255 311 362L347 84C355 26 373 -12 406 -12C440 -12 489 12 547 100Z" id="g50-233"></path><glyph.data ascent="3443" descent="-2856" horiz-adv-x="571" vert-adv-y="571"></glyph.data></g></svg>.</div>

Discrete Dynamics in Nature and Society

Coping with Loss Aversion in the Newsvendor Model

Figure 4