Algorithms as Decision-Makers

Rauno Rusko (), Sanna-Annika Koivisto and Sara Jestilä
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Rauno Rusko: University of Lapland
Sanna-Annika Koivisto: University of Lapland
Sara Jestilä: University of Lapland

A chapter in Analytics Enabled Decision Making, 2023, pp 23-44 from Springer

Abstract: Abstract This chapter introduces the role of algorithms as decision-makers in business. Algorithms will help several activities in the processes and production of the firms. Algorithms decrease the amount of human activities, decisions and delays with increasing the effectiveness of supply chains. At the same time, human decision-making power decreases and the content of work changes. Due to several platforms and the digitization of business, often the most important co-worker and boss is the platform, which gives advice where and what to do next. The role of the algorithm as a decision-maker is possible to understand in two ways: either they support decision making (decision support algorithms, DSA) or are directly decision-makers (decision-making algorithm, DMA). This dichotomy is important, but less used in the literature. This chapter not only emphasizes dichotomy but also provides an initiative to evaluate the share of DMA and DSA in algorithm-based decision making. This chapter is based on a literature review, which is completed with a short case description of algorithm-based business model of Wolt enterprise, a technology company known for its delivery platform for food and merchandise. Most of the analyzed literature is focused on ideas or experiments of algorithms that is upstream parts of algorithm-based products, not on the ready marketable algorithms.

Keywords: Algorithms; Decision making; Platform; Wolt (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/978-981-19-9658-0_2

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