AI in the workplace has the potential to change the competitive dynamics among employees. The AI system can learn from high-performing employees and make that knowledge available to others. In a competitive environment, this can disincentivize high-performing employees and ultimately backfire, leading to a decline in overall firm productivity. Our results suggest that some ostensibly simple solutions, such as guaranteeing or increasing wages for adversely affected employees, may not effectively solve the problem, and firms would have to judiciously choose optimal AI efficacy levels to achieve better outcomes.
Di Yuan (Assistant Professor, Auburn University), Manmohan Aseri (Assistant professor, University of Maryland), Narayan Ramasubbu (Professor, University of Pittsburgh)
Management Science