Optimized decision of the bounded rationality newsboy under CVaR

For the problem of the bounded rationality newsboy´s order decision, we use the CVaR risk measurement criteria, the Arrow-Pratt risk aversion parameter and utility function, to establish a more realistic bounded rationality newsboy model, and optimized the model with the buy-back contract and revenue sharing contract. Result shows that the existence of bounded rationality deteriorate the supply chain´s performance, and different level of bounded rationality degree need different coordinate contract to reach the optimal order. Buyback contract is available in amending ordering decisions with low levels of bounded rationality newsboy, while higher levels of bounded rationality newsboy required revenue sharing contract in order to achieve the optimal profit. This result helps retailers considering bounded rationality factors which bring the decision-making bias, and provides order inspirations for all types of retailers in real life.