Considering the impacts of loss aversion and inventory inaccuracy upon a newsvendor game, this paper addresses a loss-averse retailer and a risk-neutral manufacturer decentralized supply chain wherein the manufacturer offers an item to the retailer in a stochastic demand market. The objective is to jointly determine the item's order quantity and wholesale price that optimize both members' profits, during which we learn that high level of the loss aversion damages more profit toward the

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... rer, whereas high rate of the inventory inaccuracy, including temporary and permanent inventory shrinkages, drastically impairs both members' profits. Meanwhile, the game would no longer be profitable if one of the two shrinkages is relatively high. Many managerial insights are observed from the examples hereafter.