1 option
Prediction Machines, Insurance, and Protection: An Alternative Perspective on AI's Role in Production / Ajay K. Agrawal, Joshua S. Gans, Avi Goldfarb.
- Format:
- Book
- Author/Creator:
- Agrawal, Ajay K.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w30177.
- NBER working paper series no. w30177
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2022.
- Summary:
- Recent advances in AI represent improvements in prediction. We examine how decision-making and risk management strategies change when prediction improves. The adoption of AI may cause substitution away from risk management activities used when rules are applied (rules require always taking the same action), instead allowing for decision-making (choosing actions based on the predicted state). We provide a formal model evaluating the impact of AI and how risk management, stakes, and inter-related tasks affect AI adoption. The broad conclusion is that AI adoption can be stymied by existing processes designed to address uncertainty. In particular, many processes are designed to enable coordinated decision-making among different actors in an organization. AI can make coordination even more challenging. However, when the cost of changing such processes falls, then the returns from AI adoption increase.
- Notes:
- Print version record
- June 2022.
The Penn Libraries is committed to describing library materials using current, accurate, and responsible language. If you discover outdated or inaccurate language, please fill out this feedback form to report it and suggest alternative language.