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Students Study the Business of Behavior in Lab

CLBOE Research

From left: Dr. Gary Bolton, O.P. Jindal Chair of Managerial Economics, and Dr. Elena Katok, Ashbel Smith Professor in operations management, oversee the Center and Laboratory for Behavioral Operations and Economics, where doctoral students Bahriye Cesaret and Blair Flicker are conducting research.

UT Dallas student Blair Flicker may represent the future character of research at universities nationwide. 

His academic background aligns with the type of studies that increasingly intrigue researchers: cross-discipline investigations to find answers for nagging work-related problems. Flicker, a third-year Naveen Jindal School of Management doctoral student, has an MBA and bachelor’s degrees in computer science and psychology. He also serves as assistant provost for academic affairs at the University.

Flicker is using his educational experience to study operations management with Dr. Elena Katok, Ashbel Smith Professor in operations management, in the Center and Laboratory for Behavioral Operations and Economics (CLBOE). 

How people learn and the causes of irrational behavior are critical issues in research conducted by Flicker and Bahriye Cesaret, a fifth-year doctoral student also working under Katok in the CLBOE. 

Flicker said his research goes back to his computer science and psychology experience. 

“Computer science is about solving problems,” he said. The issue that fascinates him is solving the right problems, which led him to earn his psychology degree. 

Cesaret, who has a bachelor’s degree in industrial engineering and an MBA, said she has become interested in how human behavior overrides the best logical answer. 

Cesaret is working on how regret plays into business decisions. “We think regret is important,” she said. 

These behavioral issues span all topics in business schools. At its root, it’s about human behavior. And it’s really important to understand.

Dr. Gary Bolton,
the O.P. Jindal Chair of Managerial Economics

The CLBOE allows her to isolate regret, or a decision that causes regret, and measure how that affects decision-making. She said regret has an impact on business decisions: Will I regret pricing this product this way? Or overbooking my restaurant with reservations? In the lab, she is trying to discern the thinking behind these decisions. 

“The field of operations management takes problems and translates them into mathematics,” Flicker said. “Once in mathematics, precise solutions can be given. Most researchers stop when they run out of math.” 

In the CLBOE lab, Flicker is trying to figure out how behavior influences the way companies write purchasing contracts. He said previous research addressed the issue from a strictly theoretical perspective using only math. Katok was interested in taking the next step — to see how humans would act, revealing the behavior part of the equation. 

 “Elena invited me to work on this project. … I studied the problem, prepared the laboratory experiment and ran a pilot group. This project is really just getting started,” Flicker said. What he learns may shed light on everything from the work of grocers to government contracts. 

“These behavioral issues span all topics in business schools,” said Dr. Gary Bolton, O.P. Jindal Chair of Managerial Economics, who runs the center with Katok. “At its root, it’s about human behavior. And it’s really important to understand.” 

For instance, Bolton, Katok and others have found that seasoned managers don’t make much better decisions than college freshmen about inventory purchases, belying the assumption that experience matters. But both groups are “trainable” to improve their decisions, research found. 

Flicker said this type of research, which crosses traditional academic boundaries, is a perfect fit for him. 

“My interest goes one step further than the engineering approach to solving the problem,” he said. “Anytime a business decision includes humans, you’re going to have to make many assumptions. … The lab will never be able to capture all the complexities of a business situation, but the lab can isolate many variables.” 

Other results have married business topics with behavioral issues, such as in negotiations. Bolton found that the first piece of information gathered carries more weight than information that comes afterward, a critical tip in any business relationship. It is something teenagers seem to learn intuitively. For example, it is easier to tell Dad about the near-perfect report card before breaking the news of the car wreck. 

Working in the lab has given Cesaret, who recently earned one of the Jindal School’s Outstanding Student Teacher awards, interesting stories to share with her undergraduate students. They especially appreciate stories about research showing people behave irrationally but in predictable ways. 

“Students find operations management tough because of the analytics required,” she said. Stories about work in the lab engage their curiosity. 

Bolton and Katok want the CLBOE to nurture cross-pollination of ideas with researcher networking, seminars, workshops and joint grant proposals, as well as through collaborative PhD mentoring. 

For instance, two recent CLBOE speakers study how people’s decisions affect medical care and costs. 

“We’re looking to provide economics and business a more detailed understanding of how people behave,” Bolton said.

This story was reported and written by freelance contributor Jeanne Spreier.

Jindal School Lab Proving Its Worth as Testing Ground  

The Center and Laboratory for Behavioral Operations and Economics at the Naveen Jindal School of Management is more than a handy place to test theories. 

Dr. Elena Katok, Ashbel Smith Professor in operations management, said the beauty of the lab, is that it “is the test bed for different mechanisms. … It’s very cheap to test theories, and we can control everything. It simplifies things.” 

Doctoral students use the lab to learn about conducting experiments, said Dr. Gary Bolton, O.P. Jindal Chair of Managerial Economics. They figure out how to control variables, learning what he calls the nuts and bolts of research: “What constitutes a valid experiment and … how to design experiments.” 

Without these skills, future research could be hampered, or worse yet, made irrelevant. 

Katok and Bolton direct the lab, which has 34 workstations with computers used to simulate business situations. Researchers hire students — typically undergraduates — to play games. The goal is to tease out how people learn to “play the game” of business. The better they do at the simulations, the more cash they earn. 

“These games find their way into classrooms,” Katok said. “They provide hands-on learning.” 

The lab is open to everyone who is doing behavioral research, Bolton said. 

Currently, a professor from the School of Economic, Political and Policy Sciences is doing work in the lab, as is a professor from SMU. A half-dozen JSOM professors — from marketing to finance — also are conducting research through the lab.

Media Contact: The Office of Media Relations, UT Dallas, (972) 883-2155, [email protected].

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