Prediction Machines: Economics of AI

“When prediction is cheap, there will be more prediction and more complements to prediction. These two simple economic forces drive the new opportunities that prediction machines create. At low levels, a prediction machine can relieve humans of predictive tasks and so save on costs. As the machine cranks up, prediction can change and improve decision-making quality. But at some point, a prediction machine may become so accurate and reliable that it changes how an organization does things. Some AIs will affect the economics of a business so dramatically that they will no longer be used to simply enhance productivity in executing against the strategy; they will change the strategy itself.” (Ajay Agrawal, Joshua Gans, and Avi Goldfarb. “Prediction Machines: The Simple Economics of Artificial Intelligence”, 2018)

 

Published by

Cosimo Accoto

Research Affiliate at MIT (Boston). Formerly, Partner and VP Innovation at OpenKnowledge http://www.open-knowledge.it/en/ | Books author and coauthor (recently published "Social Mobile Marketing", Egea 2014, 2e) | Digital theorist and international researcher | Analytics industry speaker | @cosimoaccoto | http://www.linkedin.com/in/cosimoaccoto | cosimo.accoto@open-knowledge.it |

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