How Does Overconfidence Affect Decision Making of the Green Product Manufacturer?

Table 1

List of notations.

Decision variable
	greenness of the product; is greenness selected by the overconfident manufacturer; is greenness selected by the rational manufacturer
	output of the manufacturer; is output selected by the overconfident manufacturer; is output selected by the rational manufacturer
Other symbols
	the level of overprecision
	the level of overestimation
	retail price
	production cost per unit
	salvage value for unsold product per unit
	greening investment factor
	the market size
	consumers’ price sensitivity to demand
	consumers’ sensitivity to greenness
	a continuous and non-negative random variable with mean 1 and variance
	the standardized variable of
,	the distribution and density function of , respectively
	the inverse function of
	a random variable,
,	the distribution and density function of , respectively
	the deterministic linear relationship between demand and the retail price and greenness
	the stochastic demand faced by the manufacturer
	the demand that the overconfident manufacturer deems
	expected profit that the overconfident manufacturer deems given and
	the optimal expected profit that the overconfident manufacturer deems
	the real expected profit of the overconfident manufacturer
	the optimal expected profit of the rational manufacturer