Regulating Artificial Intelligence

Guerreiro, João, Rebelo, Sérgio and Pedro Teles

No 18625, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We consider an environment in which there is substantial uncertainty about the potential adverse external effects of AI algorithms. We find that subjecting algorithm implementation to regulatory approval or mandating testing is insufficient to implement the social optimum. When testing costs are low, a combination of mandatory testing for external effects and making developers liable for the adverse external effects of their algorithms comes close to implementing the social optimum even when developers have limited liability.

JEL-codes: H21 O33 (search for similar items in EconPapers)
Date: 2023-11
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Working Paper: Regulating Artificial Intelligence (2023)
Working Paper: Regulating Artificial Intelligence (2023)
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