Abstract: Valuation bias, i.e., sonsumers initial valuation before purchasing that is different from the true valuation after purchasing, often occurs in online shopping and will lead to consumers returns and further affect sellers selling strategies. Two relationships between consumers initial valuation and the true valuation are considered: the mutual independence between the initial valuation and the true valuation, or their mutual dependence. First, based on these relationships, two corresponding models were built and optimal ordering quantity were given; then, the optimal decisions and expected profits are analyzed in the two models, and it was found that each model can only be conditionally optimal and the benchmark of the two models was given; finally, through numerical study, the effect of the characteristics of consumers valuation distribution on sellers optimal pricing, ordering quantity and profit was analyzed.

Key words: Online shopping, valuation bias, optimal decision, demand uncertainty