The Ordering Optimization Model for Bounded Rational Retailer with Inventory Transshipment

In order to study retailers’ ordering behavior deviating from the standard theoretical optimal decision, which is caused by information asymmetry, cognitive ability, insufficient computing and other factors, we construct a bounded-rationality choice model with quantal response equilibrium. First, existence uniqueness of equilibrium transshipment game have been proved price satisfying certain conditions. Then, numerical example demonstrates that increase parameters, will converge Nash due learning effect, their profits predicted theory. Finally, results show retailers are more averse explicit loss shortage than implicit inventory surplus quantity. Hence, tend overorder avoid shortage.