Artificial intelligence is revolutionizing the way we do business, and it can potentially allow firms to improve their decision making, given that individuals are willing to adopt algorithms in decision‐making contexts. A new Managerial and Decision Economics study indicates that cognitive perceptions play an important role on such willingness.
Artificial intelligence is revolutionizing the way we do business, and it can potentially allow firms to improve their decision making, given that individuals are willing to adopt algorithms in decision‐making contexts. A new Managerial and Decision Economics study indicates that cognitive perceptions play an important role on such willingness.
In the web-based study, 310 participants were exposed to a decision situation in which they had to make a personal strategic career choice—the selection of a new job. They were told that they were in the job market looking for their next career step, and that they had been successful in a certain number of job applications. They were asked to choose one of these job offers. For each job offer, a list of advantages and disadvantages was provided and participants were offered the option to delegate decision to select a new job to an algorithm that would be capable of selecting the objectively best solution for them. Participants had to choose whether they would be willing to delegate their decision to this algorithm.
Investigators found that participants with low levels of situational awareness were more likely to delegate. The findings emphasize the relevance of cognitive perceptions in assessing the suitability of decision‐delegation options.
Additional Information
Link to Study: https://onlinelibrary.wiley.com/doi/full/10.1002/mde.2982
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Managerial and Decision Economics will publish articles applying economic reasoning to managerial decision-making and management strategy. Management strategy concerns practical decisions that managers face about how to compete, how to succeed, and how to organize to achieve their goals. Economic thinking and analysis provides a critical foundation for strategic decision-making across a variety of dimensions. For example, economic insights may help in determining which activities to outsource and which to perform internally. They can help unravel questions regarding what drives performance differences among firms and what allows these differences to persist. They can contribute to an appreciation of how industries, organizations, and capabilities evolve. They can help managers cope with the complexities and uncertainties of a dynamic competitive environment. Compared to other journals in economics, the focus of this journal is more normative than positive and the viewpoint is focused on managerial efficiency and firm profitability rather than on social welfare. Articles are welcomed from economists, strategists, and others using economic reasoning in analyzing business problems. The journal is open to a variety of economic theoretical perspectives, including transaction cost theory, evolutionary theory, resource-based theory, agency theory, game theory, and behavioral decision theory. The journal will publish articles from all of the functional areas of economics, as long as these articles are useful for managerial decision-making, and from all the functional areas of business, so long as the articles use economic reasoning.
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