Skip to main content

The Handbook of Behavioral Operations

The Handbook of Behavioral Operations

Karen Donohue (Editor), Elena Katok (Editor), Stephen Leider (Editor)

ISBN: 978-1-119-13830-3

Oct 2018

648 pages




A comprehensive review of behavioral operations management that puts the focus on new and trending research in the field

The Handbook of Behavioral Operations offers a comprehensive resource that fills the gap in the behavioral operations management literature. This vital text highlights best practices in behavioral operations research and identifies the most current research directions and their applications. A volume in the Wiley Series in Operations Research and Management Science, this book contains contributions from an international panel of scholars from a wide variety of backgrounds who are conducting behavioral research.

The handbook provides succinct tutorials on common methods used to conduct behavioral research, serves as a resource for current topics in behavioral operations research, and as a guide to the use of new research methods. The authors review the fundamental theories and offer frameworks from a psychological, systems dynamics, and behavioral economic standpoint. They provide a crucial grounding for behavioral operations as well as an entry point for new areas of behavioral research. The handbook also presents a variety of behavioral operations applications that focus on specific areas of study and includes a survey of current and future research needs. This important resource:

  • Contains a summary of the methodological foundations and in-depth treatment of research best practices in behavioral research.
  • Provides a comprehensive review of the research conducted over the past two decades in behavioral operations, including such classic topics as inventory management, supply chain contracting, forecasting, and competitive sourcing.
  • Covers a wide-range of current topics and applications including supply chain risk, responsible and sustainable supply chain, health care operations, culture and trust.
  • Connects existing bodies of behavioral operations literature with related fields, including psychology and economics.
  • Provides a vision for future behavioral research in operations.

Written for academicians within the operations management community as well as for behavioral researchers, The Handbook of Behavioral Operations offers a comprehensive resource for the study of how individuals make decisions in an operational context with contributions from experts in the field.

Table of Contents

List of contributors


Part I: Methodology

Chapter 1: Designing and Conducting Laboratory Experiments
Elena Katok

1.1 Why Use Laboratory Experiments?

1.2 Categories of Experiments

1.3 Some Prototypical Games

1.4 Established Good Practices for Conducting BOM Laboratory

1.5 Infrastructure and Logistics


Chapter 2: Econometrics for Experiments
Kyle Hyndman and Matthew Embrey

2.1 Introduction

2.2 The Interaction between Experimental Design and Econometrics

2.3 Testing Theory and Other Hypotheses: Classical Hypothesis Testing

2.4 Testing Theory and Other Hypotheses: Regression Analysis

2.5 Dependence of Observations

2.6 Subject Heterogeneity

2.7 Structural Estimation

2.8 Concluding Remarks


Chapter 3: Incorporating Behavioral Factors into Operations Theory
Tony Haitao Cui and Yaozhong Wu

3.1 Types of Behavioral Models

3.2 Identifying Which Behavioral Factors to Include

3.3 Nesting the Standard Model

3.4 Developing Behavioral Operations Model

3.5 Modeling for Testable Predictions


Chapter 4: Behavioral Empirics and Field Experiments
Maria R. Ibanez and Bradley R. Staats

4.1 Going to the Field to Study Behavioral Operations

4.2 Analyzing the Data: Common Empirical Methods

4.3 Field Experiments (Creating the Data)

4.4 Conclusion: The Way Forward


Part II: Classical Approaches to Analyzing Behavior

Chapter 5: Biases in Individual Decision Making
Andrew M. Davis

5.1 Introduction

5.2 Judgments Regarding Risk

5.3 Evaluations of Outcomes

5.4 Bounded Rationality

5.5 Final Comments and Future Directions



Chapter 6: Other Regarding Behavior: Fairness, Reciprocity and Trust
Gary E. Bolton and Yefen Chen

6.1 Introduction

6.2 The Nature of Social Preferences

6.3 Models of Social Preferences

6.4 Fair Choice: Stability and Factors that Influence It

6.5 Reciprocal Choice

6.6 Trust and Trustworthiness

6.7 Summary: The Empirical Nature of Fair Choice


Chapter 7: Behavioral Analysis of Strategic Interactions: Game Theory, Bargaining and Agency
Stephen Leider

7.1 Behavioral Game Theory

7.2 Behavioral Analysis of Principal-Agent Problems

7.3 Bargaining


Chapter 8: Integration of Behavioral and Operational Elements through System Dynamics
J. Bradley Morrison and Rogelio Oliva

8.1 Introduction

8.2 Decision Making in a Dynamic Environment

8.3 Principles (Guidelines) for Modeling Decision-making

8.4 Grounded Development of Decision-making Processes

8.5 Formulation Development and Calibration Example

8.6 Conclusion


Part III: Applications within Operations Management

Chapter 9: Behavioral Foundations of Queueing Systems
Gad Allon and Mirko Kremer

9.1 Introduction and Framework

9.2 The Customer

9.3 The Server

9.4 The Manager

9.5 Testing Queueing Theory in the Laboratory

9.6 Conclusions and Future Research Opportunities


Chapter 10: New Product Development and Project Management Decisions
Yael Grushka-Cockayne, Sanjiv Erat, and Joel Wooten

10.1 Exploration: The Creative Process

10.2 Plan: From Creative to Reality

10.3 Execute: From Planning to Execution

10.4 Conclusions


Chapter 11: Behavioral Inventory Decisions: The Newsvendor and Other Inventory Settings
Michael Becker-Peth and Ulrich W. Thonemann

11.1 Introduction

11.2 Nominal and Actual Order Quantities

11.3 Decision Biases

11.4 Utility Functions

11.5 Individual Heterogeneity

11.6 Other Inventory Models

11.7 Summary and Outlook



Chapter 12: Forecast Decisions
Paul Goodwin, Brent Moritz, and Enno Siemsen

12.1 An Introduction to Forecasting Behavior

12.2 Judgment Biases in Point Forecasting

12.3 Judgment Biases in Forecasting Uncertainty

12.4 Organizational Forecasting Processes

12.5 Improving Judgmental Forecasting

12.6 Conclusion and Future Research Opportunities


Chapter 13: Buyer-Supplier Interactions
Kay-Yut Chen and Diana Wu

13.1 Introduction

13.2 Coordination with Imperfect Information: the Beer Distribution Game

13.3 Relationships under Incentive Conflicts: Contracting in Supply Chains

13.4 Contracting and Mechanism Design

13.5 Conclusion and Future Possibilities


Chapter 14: Trust and Trustworthiness
Özalp Özer and Yanchong Zheng

14.1 Are There Any Business Case Studies Where Trust and Trustworthiness Matter?

14.2 What Is Trust?

14.3 What Is Trustworthiness?

14.4 How Can We Measure Trust and Trustworthiness?

14.5 What Are the Building Blocks of Trust and Trustworthiness?

14.6 Two Remarks on Research Methods (Optional)

14.7 Conclusion


Chapter 15: Behavioral Research in Competitive Bidding and Auction Design
Wedad Elmaghraby and Elena Katok

15.1 Overview of Behavioral Operations Research on Auctions

15.2 What we learned from experimental economics literature on forward auctions

15.3 Buyer-Determined Auctions

15.4 Relationships and Moral Hazard in Auctions

15.5 Empirical Findings on Bidder Behavior, Judgment and Decision Making Bias

15.6 Supply Risk

15.7 Elements of Auction Design

15.8 Comparing and Combining Auctions with Negotiations

15.9 Ongoing and Future Directions


Chapter 16: Strategic Interactions in Transportation Networks
Amnon Rapoport and Vincent Mak

16.1 Introduction

16.2 Experiments on Route Choice in Networks with Fixed Architecture

16.3 Experiments on Traffic Paradoxes

16.4 Experiments on the Pigou-Knight-Downs Paradox

16.5 Experiments on the Downs-Thomson Paradox

16.6 Experiments on the Braess Paradox

16.7 Discussion and Conclusions


Chapter 17: Incorporating Customer Behavior into Operational Decisions
Anton Ovchinnikov

17.1 How to Think about “Behaviors” in Operational Settings: Customer Journey Maps

17.2 The “Before” Behaviors

17.3 The “During” Behaviors

17.4 The “After” Behaviors

17.5 Concluding Remarks


Chapter 18: The Future is Bright: Recent Trends and Emerging Topics in Behavioral Operations
Karen Donohue and Kenneth Schultz

18.1 Introduction

18.2 Current Research Trends

18.3 Emerging Behavioral Operations Topics

18.4 Final Remarks