Research on the Bullwhip Effect Based on Retailers’ Overconfidence in the Sustainable Supply Chain

The core characteristic of the bullwhip effect is that upstream companies overproduce or hoard inventory due to information distortion, leading to resource waste and increased carbon emissions, which severely affects the economic, environmental, and social efficiency of sustainable supply chains. This paper investigates the impact of retailers’ cognitive bias, namely, overconfidence, on the bullwhip effect in the sustainable supply chain. It characterizes retailers’ overconfidence from two aspects: overprecision and overestimation. This study finds that retailers’ overestimation biases distort demand forecasts, causing product orders and inventory decisions to significantly deviate from the rational optimal level, exacerbating the bullwhip effect in sustainable supply chains. In contrast, retailers’ overprecision bias reduces the forecast error, which has a mitigating effect on the bullwhip effect on inventory; however, this effect weakens as the level of overestimation increases. Furthermore, order lead time and the autocorrelation coefficient of demand moderate the bullwhip effect. Finally, through numerical simulation analysis, the interactive effects of overconfidence bias and operational parameters are effectively captured, providing strong validation for the theoretical results and research propositions. The conclusions of this study offer valuable managerial insights for mitigating the bullwhip effect of sustainable supply chain caused by irrational factors. It also provides policy recommendations for promoting the theoretical research and practice of sustainable supply chains.