The Allocation of Decision Authority to Human and Artificial Intelligence

11 Pages Posted: 22 Jan 2020 Last revised: 19 Nov 2022

See all articles by Susan Athey

Susan Athey

Stanford Graduate School of Business

Kevin Bryan

University of Toronto - Strategic Management

Joshua S. Gans

University of Toronto - Rotman School of Management; NBER

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Date Written: January 2020

Abstract

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

Carleton Athey, Susan and Bryan, Kevin and Gans, Joshua S., The Allocation of Decision Authority to Human and Artificial Intelligence (January 2020). NBER Working Paper No. w26673, Available at SSRN: https://ssrn.com/abstract=3522322

Susan Carleton Athey (Contact Author)

Stanford Graduate School of Business ( email )

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Kevin Bryan

University of Toronto - Strategic Management ( email )

Canada

Joshua S. Gans

University of Toronto - Rotman School of Management ( email )

Canada

HOME PAGE: http://www.joshuagans.com

NBER ( email )

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Cambridge, MA 02138
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