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Machines are more productive than humans until they aren't, and vice versa

Created by
  • Haebom

Author

Riccardo Zanardelli

Outline

With the advancement of artificial intelligence (AI) technology, the challenge of optimizing technological policy decisions based on economic principles has emerged. This paper develops an in-silico framework based on Monte Carlo simulations to analyze the economic impact of human and machine technologies, utilized singly or jointly, on tasks of varying difficulty. The results of this quantitative analysis reveal that automation is effective for tasks with low generalization difficulty, but may fall short of human technology in complex scenarios. Specifically, when a high level of generalization is required and error costs are high, the combination of human and machine technologies can be most effective when true augmentation is achieved. However, if synergy is not achieved, it can be a destructive option, ultimately destroying value.

Takeaways, Limitations

Takeaways:
Automation is most economical for tasks with low generalizability.
In complex and critical tasks, the combination of human-machine technologies can augment and enhance competitiveness.
Simple human-machine technology allocation can lead to value destruction.
An organized effort to reinforce it is essential.
Improving the cost-effectiveness of machine technology does not replace the importance of augmentation.
Limitations:
Specific simulation settings and assumptions are not explicitly stated.
Lack of specific methodology for achieving augmentation.
Lack of discussion about applicability to specific industries or types of work.
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