Jan 20, 2023
Avi Goldfarb and Ajay Agrawal visit Google to discuss their book
“Prediction Machines: The Simple Economics of AI.”
The idea of artificial intelligence--job-killing robots,
self-driving cars, and self-managing organizations--captures the
imagination, evoking a combination of wonder and dread for those of
us who will have to deal with the consequences. But what if it’s
not quite so complicated? The real job of artificial intelligence
is to lower the cost of prediction. And once you start talking
about costs, you can use some well-established economics to cut
through the hype.
The constant challenge for all managers is to make decisions under
uncertainty. And AI contributes by making knowing what's coming in
the future cheaper and more certain. But decision making has
another component: judgment, which is firmly in the realm of
humans, not machines. Making prediction cheaper means that we can
make more predictions more accurately and then assess them with
human judgment. Once managers can separate tasks into components of
prediction and judgment, we can begin to understand how to optimize
the interface between humans and machines.
More than just an account of AI's powerful capabilities,
“Prediction Machines” shows managers how they can most effectively
leverage AI, disrupting business as usual only where required, and
provides businesses with a toolkit to navigate the coming wave of
challenges and opportunities.
Originally published in May of 2018.
Visit YouTube.com/TalksatGoogle to watch the video.