Theory Is All You Need: AI, Human Cognition, and Decision Making

46 Pages Posted: 4 Apr 2024

See all articles by Teppo Felin

Teppo Felin

University of Oxford - Said Business School; Utah State University - Huntsman School of Business

Matthias Holweg

University of Oxford - Said Business School

Date Written: February 24, 2024

Abstract

Artificial intelligence (AI) now matches or outperforms human intelligence in an astonishing array of games, tests, and other cognitive tasks that involve high-level reasoning and thinking. Many scholars argue that—due to human bias and bounded rationality—humans should (or will soon) be replaced by AI in situations involving high-level cognition and strategic decision making. We disagree. In this paper we first trace the historical origins of the idea of artificial intelligence and human cognition as a form of computation and information processing. We highlight problems with the analogy between computers and human minds as input-output devices, using large language models as an example. Human cognition—in important instances—is better conceptualized as a form of theorizing rather than data processing, prediction, or even Bayesian updating. Our argument, when it comes to cognition, is that AI’s data-based prediction is different from human theory-based causal logic. We introduce the idea of belief-data (a)symmetries to highlight the difference between AI and human cognition, and use “heavier-than-air flight” as an example of our arguments. Theories provide a mechanism for identifying new data and evidence, a way of “intervening” in the world, experimenting, and problem solving. We conclude with a discussion of the implications of our arguments for strategic decision making, including the role that human-AI hybrids might play in this process.

Keywords: artificial intelligence, cognition, information processing, prediction, decisions, strategy, theory-based view

Suggested Citation

Felin, Teppo and Holweg, Matthias, Theory Is All You Need: AI, Human Cognition, and Decision Making (February 24, 2024). Available at SSRN: https://ssrn.com/abstract=4737265 or http://dx.doi.org/10.2139/ssrn.4737265

Teppo Felin (Contact Author)

University of Oxford - Said Business School ( email )

Park End Street
Oxford, OX1 1HP
Great Britain

HOME PAGE: http://sites.google.com/site/teppofelin2/

Utah State University - Huntsman School of Business ( email )

3500 Old Main Hill
Logan, UT 84322-3500
United States

Matthias Holweg

University of Oxford - Said Business School ( email )

Park End Street
Oxford, OX1 1HP
Great Britain

HOME PAGE: http://https://www.sbs.ox.ac.uk/about-us/people/matthias-holweg

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