Behavioral Externalities of Process Automation

51 Pages Posted: 11 Dec 2022 Last revised: 11 Apr 2024

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: April 9, 2024

Abstract

We study the behavioral effects of process automation on human workers interacting with automated tasks. We introduce a stylized normative 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 literature, we hypothesize that workers will suboptimally delay project completion. In addition, following the insights from a behavioral model, we predict that automation will alleviate this problem by reducing the uncertainty regarding project duration and completion, leading to a higher project completion rate and worker productivity. To test these predictions, we conduct an experiment replicating the theoretical model, varying (i) whether a worker collaborates with a coworker or a robot, and (ii) in the case of collaborating with a robot, whether the upstream or downstream task is the one automated. First, we find that workers largely deviate from the optimal policy, as they take longer than what the normative 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. In addition, we find that upstream automation is more beneficial than downstream automation. We also show that social preferences are an important driver of these results, since prosocial subjects tend to be more productive when collaborating with a human coworker than with a robot. Finally, we show that our findings remain robust in a continuous processing setting.

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 (April 9, 2024). 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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