AI and Actor-Specific Decisions

AI and Actor-Specific Decisions

Speaker: Teppo Felin (University of Utah)

Abstract: Artificial intelligence (AI) is increasingly seen as potentially replacing humans in decision making and problem solving across numerous domains. AI is effective for many well-specified, routine decisions. But we argue that AI cannot deal with what we call “actor-specificity.” Actor-specific decisions and problems are (a) forward-looking, (b) individual and idiosyncratic, (c) reasoning-intensive, and (d) experimental—requiring intervention in the world to generate new data. These four criteria, captured by the “FIRE” acronym, function as exclusion criteria: they identify when decisions should not be delegated to AI. The “actor” in actor-specificity refers to the focal decision maker, highlighting the need for a first-person point of view in decision making—an approach that cannot be modeled from the third-person, population-level perspective that is the basis of AI. As AI is deployed in increasingly consequential domains, the FIRE criteria offer a principled basis for determining which decisions should remain with human actors.

Bio: Teppo Felin is the Ion Foundation Endowed Professor at the David Eccles School of Business, University of Utah. Prior to joining the Eccles School, he was the Douglas D. Anderson Endowed Professor at the Huntsman School of Business, Utah State University. From 2013-2021, Felin was a Professor of Strategy at Saïd Business School, University of Oxford. He was also the Director of the  Oxford Diploma in Strategy & Innovation at Saïd Business School, University of Oxford. Felin’s research interests include strategy, artificial intelligence, microfoundations, theories of the firm, markets, and interdisciplinary approaches to novelty. His research has been published in various journals, including Organization Science, Academy of Management Review, Strategic Management Journal, Strategy Science, Industrial and Corporate Change, Research Policy, MIT Sloan Management Review, Academy of Management Perspectives, Journal of Management, Strategic Entrepreneurship Journal. He has also published interdisciplinary research in journals such as Communications of the ACM, Psychonomic Bulletin and Review, Perception, Erkenntnis, Cornell Journal of Law and Public Policy, and PLOS ONE. He has served as Co-Editor of the journal Strategic Organization and the Associate Editor of Academy of Management Annals. Prior to Oxford, Felin held academic appointments at the Marriott School, BYU and Goizueta Business School, Emory University. Prior to academia, Felin worked in venture capital. He continues to enjoy interacting with startups and fast-growing companies that are wrestling with strategy and technology-related questions. Felin was born and raised in Helsinki, Finland.