The planning of surgery durations is crucial for efficient usage of operating theaters. Both planning too long and too short durations for surgeries lead to undesirable consequences, e.g. idle time, overtime, or rescheduling of surgeries. We define these consequences as operating room inefficiency. The overall objective of planning surgery durations is to minimize expected operating room inefficiency, since surgery durations are stochastic. While most health care studies assume economically rational behavior of decision makers, experimental studies have shown that decision makers often do not act according to economic incentives. Based on insights from health care operations management, medical decision making, behavioral operations management, as well as empirical observations, we derive hypotheses that surgeons' behavior deviates from economically rational behavior. To investigate this, we undertake an experimental study where experienced surgeons are asked to plan surgeries with uncertain durations. We discover systematic deviations from optimal decision making and offer behavioral explanations for the observed biases. Our research provides new insights to tackle a major problem in hospitals, i.e. low operating room utilization going along with staff overtime.
Choosing the right subset from a set of candidate projects is a key driver of success and failure in new product development (NPD). In many cases, managers make these decisions based on intuition or simple rules. We investigate how human decision makers act in the context of project portfolio selection conducting experimental studies based on the knapsack problem. We address the question about which decision rules people apply to select a portfolio and how cognitive limitations influence their selection process. Grounded in portfolio selection practice, we investigate subjects' adherence to four heuristics. Decision making is partially explained by adherence to one simple decision rule, but decision makers' cognitive capacity limits the application of this heuristic. Subjects' cognitive deficits can be avoided by offering basic decision support, thereby increasing their heuristic adherence and their performance.
W e study a supply chain setup in which a buyer has private end customer demand information that she can share with the supplier. The demand information is relevant to the supplier's capacity decision. We address the question of whether the supplier benefits from installing nonlinear capacity reservation contracts rather than wholesale price contracts. We contribute to the literature by providing the first internally valid comparison of both contracts with human decision makers. We setup an experimental study with four treatments (both contracts as well as different supplier margins). From a supplier's perspective, we observe that the capacity reservation contract significantly outperforms the wholesale price contract; however, the supplier's benefit from using capacity reservation is much higher under low margins than under high margins. Regarding supply chain performance, the positive effect for the supplier exceeds the negative effect for the buyer in the low margin setting, while the two effects neutralize each other in the high margin setting. We identify behavioral factors explaining deviations from the theoretical predictions. In particular, we observe naı ¨ve anchoring and trust as strong behavioral drivers common to both contract types. Even though the complexity of the nonlinear contract results in weaker performance than that predicted by theory, our study reveals that suppliers can still benefit from installing them; thus, providing important managerial implications for the choice of the contract type.
Problem definition: Agile project management, in particular Scrum, is enjoying increased use in practice despite only scant scientific validation. This article explores how agile project management impacts project performance and execution. We compare the effects of agile sprints—short-term project phases characterized by time-boxed progression from one sprint to the next and self-imposed, phase-specific output goals—with those of traditional project management. Methodology/results: We decompose the two sprint elements of time-boxed progression and self-imposed, phase-specific output goals as factors in a 2 × 2 experimental design. We then conceptualize project execution as a simple real-effort task and conduct a controlled laboratory study. For a given duration, participants perform better with time-boxed progression as, without it, that is, with flexible progression, they spend too much time on early project phases at the expense of later ones. We refer to this effect as “progression fallacy” and show how it differs from well-known behavioral effects that cause project delays. Introducing self-imposed, phase-specific output goals in combination with time-boxed progression, as proposed by Scrum, does not significantly improve performance when compared with time-boxed progression alone. However, the combination of self-imposed, phase-specific output goals and flexible progression, as is common in traditional project management, amplifies the progression fallacy with the result that goal-setting has a negative performance effect. In two control treatments, we show that the progression fallacy is robust to planning and progression prompts despite some mitigation. Managerial implications: This study contributes evidence of higher project performance when working in agile sprints, which mitigate behavioral flaws present in traditional project management. Not only do these behavioral insights apply to project management; they are also relevant in the broader context of task completion.
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