Open AccessResearch on Fresh Agricultural Product Based on the Retailer's Overconfidence under Options and Spot Markets
Author(s) -
Kai Nie,
Miaojie Yu
Publication year - 2013
Publication title -
international journal of managing information technology
Language(s) - English
Resource type - Journals
eISSN - 0975-5926
pISSN - 0975-5586
DOI - 10.5121/ijmit.2013.5403
Subject(s) - overconfidence effect , business , spot market , spot contract , product (mathematics) , agriculture , agribusiness , industrial organization , commerce , finance , psychology , futures contract , mathematics , social psychology , electricity , geometry , electrical engineering , engineering , ecology , biology
In this article, we analyze the application of options contract in the special commodity supply chainsuch asfresh agricultural products. This problem is discussed from the point of the retailer. When spot market andfuture market are both available, we discuss how the retailer chooses the optimal production. Furthermore,overconfidence is introduced to the supply chain ofthe fresh agricultural products, which has not happenedbefore. Thenbased on the overconfidence of the retailer, we explore how overconfidence affects the supplychain system under different circumstances. At last, we get the conclusion that different overconfidencelevel has different affection on retailer’s optimalordering quantity and profit