In their bestselling first book, Prediction Machines, eminent economists Ajay Agrawal, Joshua Gans, and Avi Goldfarb explained the simple yet game-changing economics of AI. Now, in Power and Prediction, they go deeper, examining the most basic unit of analysis: the decision. The authors explain that the two key decision-making ingredients are prediction and judgment, and we perform both together in our minds, often without realizing it. The rise of AI is shifting prediction from humans to machines, relieving people from this cognitive load while increasing the speed and accuracy of decisions.
This sets the stage for a flourishing of new decisions and has profound implications for system-level innovation. Redesigning systems of interdependent decisions takes time, but when these new systems emerge, they can be disruptive on a global scale. Decision-making confers power. In industry, power confers profits; in society, power confers control. This process will have winners and losers, and the authors show how businesses can leverage opportunities, as well as protect their positions.
Filled with illuminating insights, rich examples, and practical advice, Power and Prediction is the must-listen guide for any business leader or policymaker on how to make the coming AI disruptions work for you rather than against you.