Managing Intelligence: Skilled Experts and AI in Markets for Complex Products
Jonathan Gruber (),
Benjamin R. Handel,
Samuel H. Kina and
Jonathan T. Kolstad
No 27038, NBER Working Papers from National Bureau of Economic Research, Inc
In numerous high stakes markets skilled experts play a key role in facilitating consumer choice of complex products. New artificial intelligence (AI) technologies are increasingly being used to augment expert decisions. We study the role of technology and expertise in the market for health insurance, where consumer choices are widely known to be sub-optimal. Our analysis leverages the large-scale implementation of an AI-based decision support tool in a private Medicare exchange where consumers are randomized to skilled agents over time. We find that, prior to AI-based technology, skilled experts in this market exhibit the same type of inconsistent behavior found in previous studies of individual choices, costing consumers $1260 on average. The addition of AI-based decision support improves outcomes by $278 on average and substantially reduces heterogeneity in broker performance. Experts efficiently synthesize private information, incorporating AI-based recommendations along dimensions that are well suited to AI (e.g. total expected patient costs), but overruling AI-based recommendations along dimensions for which humans are better suited (e.g. specifics of doctor networks). As a result, switching plans, an ex-post measure of plan satisfaction, is meaningfully lower for agents making AI-based recommendations. While AI is a complement to skill on average, we find that it is a substitute across the skill distribution; lower quality agents provide better recommendations with AI than the top agents did without it. Overall productivity rises, with the introduction of decision support associated with a 21% reduction in call time for enrollment.
JEL-codes: I13 J24 L15 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-big, nep-gen, nep-hea and nep-ias
Note: AG HC IO PE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed
Downloads: (external link)
Access to the full text is generally limited to series subscribers, however if the top level domain of the client browser is in a developing country or transition economy free access is provided. More information about subscriptions and free access is available at http://www.nber.org/wwphelp.html. Free access is also available to older working papers.
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:27038
Ordering information: This working paper can be ordered from
The price is Paper copy available by mail.
Access Statistics for this paper
More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().