Behavioral operations research

Behavioral operations research (BOR) examines the behavior of actual human agents in complex decision problems. BOR is the operations management analog of experimental economics and behavioral finance, and is part of the field known as management science.

In the vast majority of operations, people are a critical component to the functioning of the system and influence both the way operating systems work and how they perform. Yet most formal analytical models in operations assume that the humans 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.

Most formal analytical models in operations management (OM) assume that the agents who participate in operating systems or processes—as decision-makers, problem solvers, implementers, workers or customers— are either fully rational or can be induced to behave rationality. More specifically, they can distinguish signal from noise; they react to relevant information and discard irrelevant information; their preferences are consistent; their decision-making process incorporates all relevant alternatives and variables and is unhampered by cognitive biases or emotions. While advances in the understanding of human behavior and cognition have begun to influence the fields ofeconomics, finance, accounting, law, marketing and, more recently, strategy, a “behavioral perspective” has largely been absent in the field of operations.

Some problems studied in behavioral operations research:

• Newsvendor problem
• Assignment problem
• Secretary problem
• Beer Distribution Game
• Scheduling
• Optimal maintenance
• Queueing theory

External links

• Behavioral Dynamics in Operations Management (BDOM) Network
• Behavioral Research in Operations Management 2006 (Conference)
• Harvard Behavioral Operations Conference