Prof. Karl Reiner Lang (City University of New York)

Date: Tuesday, June 24, 2025 2:00 pm-3:30 pm
Time:2:00 pm-3:30 pm
Location: Ludwigstr. 28 RG/II; Room 211b
Title: "Human-Machine Collaboration and Algorithmic Decision-Making in Organizations: Do Humans Still Matter?"
Abstract: Organizations increasingly deploy artificial intelligence (AI) systems to automate specific tasks and assist human experts in organizational decision-making. In this paper, we focus on complex task settings wherein human decision-makers work with AI systems. Using credit authorization for consumer loans as our specific context, we conduct an economic experiment with a repeated round design to investigate how organizations can create business value from the new human– machine collaborative decision-making paradigm. Our results suggest that in parallel with AI technology investments, firms need to design complementary organizational practices to foster effective human-machine collaboration in the work process. Only then can they achieve higher levels of algorithm appreciation, leading to better decisions, made with stronger confidence, and in turn increasing organizational profits. We also show that, over time, human decision-makers and machines develop more collaborative work relationships and outperform AI machines in stand-alone settings. Finally, we find evidence that keeping humans in the loop matters most in AI-powered organizations.