Work

The Impact of Optimism Bias on Strategic Decision-Making and Efficiency in Online Retail Supply Chains

Year: 2024

Type: article

Abstract: This paper examines the effects of optimism bias within online retail supply chains. Here, optimism refers to a cognitive bias wherein the third-party seller and the e-commerce platform underestimate the likelihood of facing low market potential. The analysis begins by exploring the impacts of each party’s respective biases. The results indicate that while seller optimism generally leads to self-detrimental outcomes, it can also benefit both the platform and the overall system. Conversely, platform optimism does not permanently harm the platform itself but consistently disadvantages the seller and negatively impacts the supply chain. This work then investigates the combined effects of seller and platform optimism on overall system performance, revealing that the entire channel can, in fact, gain from optimism bias. This research offers insights into strategic approaches that may enhance the efficiency of online retail supply chains.

Source: Systems

DOI: 10.3390/systems12120574

Author: Jialu Li

Institution: Shandong University of Finance and Economics

Language: English

Topic: Supply Chain and Inventory Management

Subfield: Management Information Systems

Field: Business, Management and Accounting

Domain: Social Sciences

Open Access status: gold

Estimated APC paid: $2,728

Funders: Ministry of Education of the People's Republic of China, Natural Science Foundation of Shandong Province, Humanities and Social Sciences Youth Foundation, Ministry of Education of the People's Republic of China, Science and Technology Support Plan for Youth Innovation of Colleges and Universities of Shandong Province of China