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Toward a Theory of Behavioral Operations

Tepper School of Business, Carnegie Mellon University, Pittsburgh, Pennsylvania 15213
Harvard Business School, Boston, Massachusetts 02163
fgino{at}andrew.cmu.edu
gpisano{at}hbs.edu

Human beings are critical to the functioning of the vast majority of operating systems, influencing both the way these systems work and how they perform. Yet most formal analytical models of operations assume that the people who participate in operating systems are fully rational or at least can be induced to behave rationally. Many other disciplines, including economics, finance, and marketing, have successfully incorporated departures from this rationality assumption into their models and theories. In this paper, we argue that operations management scholars should do the same. We explore the theoretical and practical implications of incorporating behavioral and cognitive factors into models of operations management and suggest fruitful avenues for research in behavioral operations.

Key Words: behavioral operations; decision making; beer game; system dynamics; cognitive biases
History: Received: March 21, 2006; accepted: December 1, 2007.

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