Behavioral Operations: Cognitive Biases and Mitigation Strategies

This thesis explores how cognitive biases shape and often distort managerial decision-making within the domain of Operations Management. Particular emphasis is placed on the emerging field of Behavioral Operations, which challenges the traditional assumption of fully rational decision-makers by integrating psychological and behavioral insights into the study of operational processes. The work begins by presenting the theoretical foundations of Behavioral Operations and clarifying how human behavior systematically deviates from the assumptions of rational choice models traditionally employed in operations research. It then provides an in-depth analysis of the most recurrent biases that shape organizational decision-making, highlighting their practical implications for firms. Building upon this analysis, the work investigates a spectrum of mitigation strategies, categorizing them into motivational, cognitive, and technological approaches, and discussing how these methods can foster more accurate and effective decision-making in complex operational contexts. A dedicated section focuses on the Newsvendor Problem, a classical framework in inventory management that provides a controlled setting for analyzing how cognitive biases systematically influence order quantity decisions and the resulting profit outcomes. The final part of the work addresses group decision-making processes, analyzing common collective biases and presenting corrective mechanisms to foster more balanced and accurate judgments.