Behavioral Externalities of Process Automation

41 Pages Posted: 11 Dec 2022

See all articles by Ruth Beer

Ruth Beer

City University of NY, Baruch College, Zicklin School of Business

Anyan Qi

University of Texas at Dallas - Naveen Jindal School of Management

Ignacio Ríos

University of Texas at Dallas - Department of Information Systems & Operations Management

Date Written: December 7, 2022

Abstract

We study the behavioral effects of process automation on human workers interacting with automated tasks. We introduce a stylized model with two workers who complete their tasks sequentially, working toward a joint project to obtain a fixed payment plus a variable bonus that depends on how early the project is completed. We show that workers will complete their tasks as soon as possible if the early completion bonus is high enough. Following the behavioral operations literature, we hypothesize that workers will suboptimally delay project completion. In addition, we predict that automation will alleviate this problem by reducing the uncertainty in regard to task completion, leading to a higher project completion rate and worker productivity. To test these predictions, we conduct an experiment replicating the theoretical model, varying whether a worker collaborates with a coworker or robot. First, we find that workers largely deviate from the optimal policy, as they take longer than what the theory prescribes to complete their tasks or do not complete the project. Second, we show that process automation increases the project completion rate and reduces the project completion time, confirming the benefits of process automation. Interestingly, workers who collaborate with robots take longer to complete their tasks, contradicting our initial hypothesis that process automation has a positive effect on the productivity of human workers. An additional treatment shows that the reduced uncertainty derived from process automation cannot be leveraged to improve workers' productivity in the same way as reduced uncertainty in a human-human setting and that social preferences are an important driver of this result.

Keywords: behavioral operations management, experiments, process automation, collaboration

JEL Classification: D24, D03, C72, C91

Suggested Citation

Beer, Ruth and Qi, Anyan and Ríos, Ignacio, Behavioral Externalities of Process Automation (December 7, 2022). Available at SSRN: https://ssrn.com/abstract=4295527 or http://dx.doi.org/10.2139/ssrn.4295527

Ruth Beer

City University of NY, Baruch College, Zicklin School of Business ( email )

One Bernard Baruch Way
New York, NY 10010
United States

Anyan Qi (Contact Author)

University of Texas at Dallas - Naveen Jindal School of Management ( email )

P.O. Box 830688
Richardson, TX 75083-0688
United States

Ignacio Ríos

University of Texas at Dallas - Department of Information Systems & Operations Management ( email )

P.O. Box 830688
Richardson, TX 75083-0688
United States

HOME PAGE: http://https://iriosu.github.io

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