The Allocation of Decision Authority to Human and Artificial Intelligence
11 Pages Posted: 22 Jan 2020 Last revised: 19 Nov 2022
Date Written: January 2020
The allocation of decision authority by a principal to either a human agent or an artificial intelligence (AI) is examined. The principal trades off an AI’s more aligned choice with the need to motivate the human agent to expend effort in learning choice payoffs. When agent effort is desired, it is shown that the principal is more likely to give that agent decision authority, reduce investment in AI reliability and adopt an AI that may be biased. Organizational design considerations are likely to impact on how AI’s are trained.
Suggested Citation: Suggested Citation