The impact of promotional signs on newsboy's ordering decision

Promotion is an important practice in marketing practice. How to carry out promotion and achieve the ideal effect is always the focus of the retailers. This paper looks at the influence of promotional signs on purchasing decisions in newsvendor problems, and focus on "bounded rational decision". We adopt empirical research methods, design experiments from the perspective of retailers and simulate a two-phase newsvendor setting with the expected rise of procurement prices. Through the statistical analysis of subjects' actual ordering quantity of goods, the effect of promotional signs on retailers' ordering decisions is studied. We then analyze the results under different settings of factors, and explain the possible reason why the differences are produced. The results show that people are bounded rational in actual decision-making, and their decisions are affected by psychological suggestion, which can lead to decision bias.