1JM40
Article Summary
,Contents
Lecture 1...................................................................................................................................................... 5
Toward a Theory of Behavioral Operations Francesca Gino Gary Pisano..................................................5
Key constructs...................................................................................................................................... 5
Key findings.......................................................................................................................................... 6
Key takeaways...................................................................................................................................... 7
Behavioral Operations: Past, Present, and Future Karen Donohue, Özalp Özer, Yanchong Zheng...........7
Key concepts........................................................................................................................................ 8
Key findings.......................................................................................................................................... 8
Key takeaways...................................................................................................................................... 8
Fildes, R., Goodwin, P., Lawrence, M., & Nikolopoulos, K. (2009). Effective forecasting and judgmental
adjustments An empirical evaluation and strategies for improvement in supply-chain planning.............9
Key findings.......................................................................................................................................... 9
Key takeaways...................................................................................................................................... 9
Lecture 2...................................................................................................................................................... 9
Becker‐Peth, M., Hoberg, K., & Protopappa‐Sieke, M. (2019). Multiperiod inventory management with
budget cycles Rational and behavioral decision‐making. Production and Operations Management......10
Key constructs.................................................................................................................................... 10
Key findings........................................................................................................................................ 10
Croson, R., & Donohue, K. (2006). Behavioral causes of the bullwhip effect and the observed value of
inventory information. Management science, 52(3), 323-336...............................................................10
Hypothesis and results....................................................................................................................... 10
Conclusion and discussion.................................................................................................................. 11
Schweitzer, M. E., & Cachon, G. P. (2000). Decision bias in the newsvendor problem with a known
demand distribution Experimental evidence. Management Science, 46(3), 404-420.............................12
Key findings........................................................................................................................................ 12
Conclusion and discussion.................................................................................................................. 12
Lecture 3.................................................................................................................................................... 13
Yu, Q., Allon, G., & Bassamboo, A. (2016). How do delay announcements shape customer behavior An
empirical study. Management Science, 63, 1-20.................................................................................... 13
Key constructs.................................................................................................................................... 13
Research problem and research question.......................................................................................... 13
Methods............................................................................................................................................. 14
Results................................................................................................................................................ 14
, Conclusion and discussion.................................................................................................................. 14
Bitran, G. R., Ferrer, J. C., & Rocha e Oliveira, P. (2008). Om forum—managing customer experiences
perspectives on the temporal aspects of service encounters.................................................................14
Key constructs.................................................................................................................................... 14
Key findings........................................................................................................................................ 16
Key take-aways.................................................................................................................................. 17
Tong, J., & Feiler, D. (2016). A behavioral model of forecasting Naive statistics on mental samples.
Management Science, 63(11), 3609-3627.............................................................................................. 18
Key constructs.................................................................................................................................... 18
Key findings........................................................................................................................................ 18
Key take aways................................................................................................................................... 19
Lecture 4.................................................................................................................................................... 20
Contracting in Supply Chains: A Laboratory Investigation Elena Katok, Diana Yan Wu...........................20
Key constructs.................................................................................................................................... 20
Key findings........................................................................................................................................ 21
Key take aways................................................................................................................................... 21
Trust, Trustworthiness, and Information Sharing in Supply Chains Bridging China and the United States
Özalp Özer, Yanchong Zheng, Yufei Ren................................................................................................. 22
Key findings........................................................................................................................................ 23
Key take aways................................................................................................................................... 23
Lecture 5.................................................................................................................................................... 24
Dietvorst, B. J., Simmons, J. P., & Massey, C. (2015). Algorithm aversion People erroneously avoid
algorithms after seeing them err. Journal of Experimental Psychology General, 144, 114-126..............24
Key constructs.................................................................................................................................... 24
Key findings........................................................................................................................................ 24
Key take aways................................................................................................................................... 24
Dietvorst, B. J., Simmons, J. P., & Massey, C. (2016). Overcoming algorithm aversion People will use
imperfect algorithms if they can (even slightly) modify them. Management Science, 64, 1155–1170...25
Key findings........................................................................................................................................ 25
Key take aways................................................................................................................................... 25
Logg, J. M, Minson, J. A, & Moore, D. A (2019). Algorithm appreciation People prefer algorithmic to
human judgment. Organizational Behavior and Human Decision Processes, 151, 90–103.....................25
Key findings........................................................................................................................................ 25
Key take aways................................................................................................................................... 25
Lecture 6.................................................................................................................................................... 26
, Buell, R. W., & Norton, M. I. (2011). The labor illusion How operational transparency increases
perceived value. Management Science, 57, 1564-1579.........................................................................26
Key constructs.................................................................................................................................... 26
Key findings........................................................................................................................................ 26
Key take aways................................................................................................................................... 26
Buell, R. W., Kim, T., & Tsay, C. J. (2016). Creating reciprocal value through operational transparency.
Management Science, 63, 1673-1695.................................................................................................... 28
Key constructs.................................................................................................................................... 28
Key findings........................................................................................................................................ 28
Key take aways................................................................................................................................... 28
Kruger, J., Wirtz, D., Van Boven, L., & Altermatt, T. W. (2004). The effort heuristic. Journal of
Experimental Social Psychology, 40, 91–98............................................................................................ 28
Key findings........................................................................................................................................ 28
Key take aways................................................................................................................................... 29
Lecture 7.................................................................................................................................................... 29
Gneezy, U., & Rustichini, A. (2000). Pay enough or don’t pay at all. Quarterly Journal of Economics, 115,
791-810.................................................................................................................................................. 29
Key constructs.................................................................................................................................... 29
Key findings........................................................................................................................................ 29
Key take aways................................................................................................................................... 29
Gneezy, U., Meier, S., & Rey-Biel, P. (2011) When and why incentives (don't) work to modify behavior.
Journal of Economic Perspectives, 25,191-209....................................................................................... 29
Key constructs.................................................................................................................................... 29
Key findings........................................................................................................................................ 29
Key take aways................................................................................................................................... 30
Heyman, J., & Ariely, D. (2004). Effort for payment A tale of two markets. Psychological Science, 15,
787–793................................................................................................................................................. 30
Key constructs.................................................................................................................................... 30
Key findings........................................................................................................................................ 30
Key take aways................................................................................................................................... 31
Lecture 8.................................................................................................................................................... 31
Evans, A. M., & Krueger, J. I. (2009). The psychology (and economics) of trust. Social and Personality
Psychology Compass, 3, 1003–1017....................................................................................................... 31
Key constructs.................................................................................................................................... 31
Key findings........................................................................................................................................ 32
Key take aways................................................................................................................................... 32
, Malhotra, D., & Murnighan, K. (2002). The effects of contracts on interpersonal trust. Administrative
Science Quarterly, 47, 534–559.............................................................................................................. 33
Key constructs.................................................................................................................................... 33
Key findings........................................................................................................................................ 33
Key take aways................................................................................................................................... 34
Peysakhovich, A., & Rand, D. G. (2015). Habits of virtue Creating norms of cooperation and defection in
the laboratory. Management Science, 62,631–647................................................................................ 34
Key constructs.................................................................................................................................... 34
Key findings........................................................................................................................................ 34
Key take aways................................................................................................................................... 35
Lecture 1
Toward a Theory of Behavioral Operations Francesca
Gino Gary Pisano
Key constructs
Design Specification of the various processes, policies. And strategies that constitute
the overall system.
Management Decisions and actions that take place within the constraints imposed by the
design of the operating system.
Improving the system Experimentation and learning activities geared towards enhancing operating
performance over time.
Behavioral operations Emergent approach to the study of operations that explicitly incorporate social
and cognitive psychology theory.
Two categories of inquiry need to be s
Social psychology Study of nature and cause of human social behavior -> understand relationship
between minds, groups and behaviours int three primary ways:
How the actual, imagined or implied presence of one or more people
influences the thoughts, feelings and behaviors of individuals.
Influence that individual perceptions, beliefs and behaviours have upon
the behavior of groups.
Groups as behavioral entities, relationships and influences of one group
upon another group.
Bullwhip effect Phenomenon affecting supply chains-> as demand for a product, filtered by
product ordering decisions move upstream in the chain from consumer toward
the manufacturer, that demand becomes more and more erratic and swings in
larger and larger cycles.
, Operational cause of the bullwhip effect-> four factors:
- Demand forecast updating
- Order batching
- Price fluctuation
- Rationing and shortage gaming.
Behavioral cause of the bullwhip effect:
- Cognitive limitations
- Inability to coordinate
Key findings
Bullwhip effect may not be entire driven by the inter-firm dynamics that arise when firms interact in a
supply chain.
System dynamics models in operations suggest: Performance problems in operations are as much a
function of behavioral factors and cognitive biases as they are the function of structural factors.
Socio-technical view within technology management: physical technologies are socio-technical systems
comprised of humans, human activity, spaces artifacts, tools and communication media
Taking behavioral and cognitive factors into account can lead to fundamentally different predictions
about the performance of given operating systems under specific conditions.
Two other streams of research might be considered part of behavioral operations:
- Socio-technical view within technology management: change in the technology and techniques
of work impacts social interactions in the workplace
o changing the technical system without attention to the social system can lead to
unintended consequences.
- Human factor engineering: focus on how people interact with products ,tools, procedures and
any processes likely to be encountered in the modern world
o Conventional engineering approach ensuring safety tend to make accidents more likely
by increasing complexity of the system. While building on the insight coming from
human factor engineering studies, behavioral operations researcher should explore the
impact of the human factor in alle the aspects involved in an OM system. Not only
design but also management and improvement.
Explanations for project lateness:
- Planning fallacy
- Wishful thinking
- Overconfidence bias
Explanations for over-commitment:
- Inaction inertia
- Procrastination
Article Summary
,Contents
Lecture 1...................................................................................................................................................... 5
Toward a Theory of Behavioral Operations Francesca Gino Gary Pisano..................................................5
Key constructs...................................................................................................................................... 5
Key findings.......................................................................................................................................... 6
Key takeaways...................................................................................................................................... 7
Behavioral Operations: Past, Present, and Future Karen Donohue, Özalp Özer, Yanchong Zheng...........7
Key concepts........................................................................................................................................ 8
Key findings.......................................................................................................................................... 8
Key takeaways...................................................................................................................................... 8
Fildes, R., Goodwin, P., Lawrence, M., & Nikolopoulos, K. (2009). Effective forecasting and judgmental
adjustments An empirical evaluation and strategies for improvement in supply-chain planning.............9
Key findings.......................................................................................................................................... 9
Key takeaways...................................................................................................................................... 9
Lecture 2...................................................................................................................................................... 9
Becker‐Peth, M., Hoberg, K., & Protopappa‐Sieke, M. (2019). Multiperiod inventory management with
budget cycles Rational and behavioral decision‐making. Production and Operations Management......10
Key constructs.................................................................................................................................... 10
Key findings........................................................................................................................................ 10
Croson, R., & Donohue, K. (2006). Behavioral causes of the bullwhip effect and the observed value of
inventory information. Management science, 52(3), 323-336...............................................................10
Hypothesis and results....................................................................................................................... 10
Conclusion and discussion.................................................................................................................. 11
Schweitzer, M. E., & Cachon, G. P. (2000). Decision bias in the newsvendor problem with a known
demand distribution Experimental evidence. Management Science, 46(3), 404-420.............................12
Key findings........................................................................................................................................ 12
Conclusion and discussion.................................................................................................................. 12
Lecture 3.................................................................................................................................................... 13
Yu, Q., Allon, G., & Bassamboo, A. (2016). How do delay announcements shape customer behavior An
empirical study. Management Science, 63, 1-20.................................................................................... 13
Key constructs.................................................................................................................................... 13
Research problem and research question.......................................................................................... 13
Methods............................................................................................................................................. 14
Results................................................................................................................................................ 14
, Conclusion and discussion.................................................................................................................. 14
Bitran, G. R., Ferrer, J. C., & Rocha e Oliveira, P. (2008). Om forum—managing customer experiences
perspectives on the temporal aspects of service encounters.................................................................14
Key constructs.................................................................................................................................... 14
Key findings........................................................................................................................................ 16
Key take-aways.................................................................................................................................. 17
Tong, J., & Feiler, D. (2016). A behavioral model of forecasting Naive statistics on mental samples.
Management Science, 63(11), 3609-3627.............................................................................................. 18
Key constructs.................................................................................................................................... 18
Key findings........................................................................................................................................ 18
Key take aways................................................................................................................................... 19
Lecture 4.................................................................................................................................................... 20
Contracting in Supply Chains: A Laboratory Investigation Elena Katok, Diana Yan Wu...........................20
Key constructs.................................................................................................................................... 20
Key findings........................................................................................................................................ 21
Key take aways................................................................................................................................... 21
Trust, Trustworthiness, and Information Sharing in Supply Chains Bridging China and the United States
Özalp Özer, Yanchong Zheng, Yufei Ren................................................................................................. 22
Key findings........................................................................................................................................ 23
Key take aways................................................................................................................................... 23
Lecture 5.................................................................................................................................................... 24
Dietvorst, B. J., Simmons, J. P., & Massey, C. (2015). Algorithm aversion People erroneously avoid
algorithms after seeing them err. Journal of Experimental Psychology General, 144, 114-126..............24
Key constructs.................................................................................................................................... 24
Key findings........................................................................................................................................ 24
Key take aways................................................................................................................................... 24
Dietvorst, B. J., Simmons, J. P., & Massey, C. (2016). Overcoming algorithm aversion People will use
imperfect algorithms if they can (even slightly) modify them. Management Science, 64, 1155–1170...25
Key findings........................................................................................................................................ 25
Key take aways................................................................................................................................... 25
Logg, J. M, Minson, J. A, & Moore, D. A (2019). Algorithm appreciation People prefer algorithmic to
human judgment. Organizational Behavior and Human Decision Processes, 151, 90–103.....................25
Key findings........................................................................................................................................ 25
Key take aways................................................................................................................................... 25
Lecture 6.................................................................................................................................................... 26
, Buell, R. W., & Norton, M. I. (2011). The labor illusion How operational transparency increases
perceived value. Management Science, 57, 1564-1579.........................................................................26
Key constructs.................................................................................................................................... 26
Key findings........................................................................................................................................ 26
Key take aways................................................................................................................................... 26
Buell, R. W., Kim, T., & Tsay, C. J. (2016). Creating reciprocal value through operational transparency.
Management Science, 63, 1673-1695.................................................................................................... 28
Key constructs.................................................................................................................................... 28
Key findings........................................................................................................................................ 28
Key take aways................................................................................................................................... 28
Kruger, J., Wirtz, D., Van Boven, L., & Altermatt, T. W. (2004). The effort heuristic. Journal of
Experimental Social Psychology, 40, 91–98............................................................................................ 28
Key findings........................................................................................................................................ 28
Key take aways................................................................................................................................... 29
Lecture 7.................................................................................................................................................... 29
Gneezy, U., & Rustichini, A. (2000). Pay enough or don’t pay at all. Quarterly Journal of Economics, 115,
791-810.................................................................................................................................................. 29
Key constructs.................................................................................................................................... 29
Key findings........................................................................................................................................ 29
Key take aways................................................................................................................................... 29
Gneezy, U., Meier, S., & Rey-Biel, P. (2011) When and why incentives (don't) work to modify behavior.
Journal of Economic Perspectives, 25,191-209....................................................................................... 29
Key constructs.................................................................................................................................... 29
Key findings........................................................................................................................................ 29
Key take aways................................................................................................................................... 30
Heyman, J., & Ariely, D. (2004). Effort for payment A tale of two markets. Psychological Science, 15,
787–793................................................................................................................................................. 30
Key constructs.................................................................................................................................... 30
Key findings........................................................................................................................................ 30
Key take aways................................................................................................................................... 31
Lecture 8.................................................................................................................................................... 31
Evans, A. M., & Krueger, J. I. (2009). The psychology (and economics) of trust. Social and Personality
Psychology Compass, 3, 1003–1017....................................................................................................... 31
Key constructs.................................................................................................................................... 31
Key findings........................................................................................................................................ 32
Key take aways................................................................................................................................... 32
, Malhotra, D., & Murnighan, K. (2002). The effects of contracts on interpersonal trust. Administrative
Science Quarterly, 47, 534–559.............................................................................................................. 33
Key constructs.................................................................................................................................... 33
Key findings........................................................................................................................................ 33
Key take aways................................................................................................................................... 34
Peysakhovich, A., & Rand, D. G. (2015). Habits of virtue Creating norms of cooperation and defection in
the laboratory. Management Science, 62,631–647................................................................................ 34
Key constructs.................................................................................................................................... 34
Key findings........................................................................................................................................ 34
Key take aways................................................................................................................................... 35
Lecture 1
Toward a Theory of Behavioral Operations Francesca
Gino Gary Pisano
Key constructs
Design Specification of the various processes, policies. And strategies that constitute
the overall system.
Management Decisions and actions that take place within the constraints imposed by the
design of the operating system.
Improving the system Experimentation and learning activities geared towards enhancing operating
performance over time.
Behavioral operations Emergent approach to the study of operations that explicitly incorporate social
and cognitive psychology theory.
Two categories of inquiry need to be s
Social psychology Study of nature and cause of human social behavior -> understand relationship
between minds, groups and behaviours int three primary ways:
How the actual, imagined or implied presence of one or more people
influences the thoughts, feelings and behaviors of individuals.
Influence that individual perceptions, beliefs and behaviours have upon
the behavior of groups.
Groups as behavioral entities, relationships and influences of one group
upon another group.
Bullwhip effect Phenomenon affecting supply chains-> as demand for a product, filtered by
product ordering decisions move upstream in the chain from consumer toward
the manufacturer, that demand becomes more and more erratic and swings in
larger and larger cycles.
, Operational cause of the bullwhip effect-> four factors:
- Demand forecast updating
- Order batching
- Price fluctuation
- Rationing and shortage gaming.
Behavioral cause of the bullwhip effect:
- Cognitive limitations
- Inability to coordinate
Key findings
Bullwhip effect may not be entire driven by the inter-firm dynamics that arise when firms interact in a
supply chain.
System dynamics models in operations suggest: Performance problems in operations are as much a
function of behavioral factors and cognitive biases as they are the function of structural factors.
Socio-technical view within technology management: physical technologies are socio-technical systems
comprised of humans, human activity, spaces artifacts, tools and communication media
Taking behavioral and cognitive factors into account can lead to fundamentally different predictions
about the performance of given operating systems under specific conditions.
Two other streams of research might be considered part of behavioral operations:
- Socio-technical view within technology management: change in the technology and techniques
of work impacts social interactions in the workplace
o changing the technical system without attention to the social system can lead to
unintended consequences.
- Human factor engineering: focus on how people interact with products ,tools, procedures and
any processes likely to be encountered in the modern world
o Conventional engineering approach ensuring safety tend to make accidents more likely
by increasing complexity of the system. While building on the insight coming from
human factor engineering studies, behavioral operations researcher should explore the
impact of the human factor in alle the aspects involved in an OM system. Not only
design but also management and improvement.
Explanations for project lateness:
- Planning fallacy
- Wishful thinking
- Overconfidence bias
Explanations for over-commitment:
- Inaction inertia
- Procrastination
