Studies in the psychology of individual choice have identified numerous cognitive, informational,temporal, and other limitations which bound human rationality, often producing systematic errors and biases in judgments and choice. Yet for the most part models of aggregate phenomena in management science and economics have not adopted postulates of human behavior consistent with such micro-empirical knowledge of individual decisionmaking. One reason has been the difficulty of extending the experimental methods used to study individual decisions to aggregate, dynamic settings. This paper reports an experiment on the generation of macro-dynamics from microstructure in a common and important managerial context. Subjects play the role of managers in a simulated inventory management system, the “Beer Distribution Game”. The simulated environment contains multiple actors, feedbacks, nonlinearities, and time delays. The interaction of individual decisions with the structure of the simulated firm produces aggregate dynamics which systematically diverge from optimal behavior. Subjects generate large amplitude oscillations with stable phase and gain relationships among the variables. An anchoring and adjustment heuristic for stock management is proposed as a model of the subject's decision process. The parameters of the rule are estimated and the rule is shown to explain the subjects’ behavior well. Analysis shows the subjects fall victim to several 'misperceptions of feedback' identified in prior experimental studies of dynamic decisionmaking. Specifically, they fail to account for control actions which have been initiated but have not yet had their effect. More subtle, subjects are insensitive to the presence of feedback from their decisions to the environment and attribute the dynamics to exogenous variables, leading their normative efforts away from the source of difficulty. The experimental results are related to prior tests of the proposed heuristic and the generality of the results is considered. Finally the implications for behavioral theories of aggregate social and economic dynamics are explored.