The dark and bright sides of IT and AI-based automation: theoretical perspectives and empirical findings

Abstract

This dissertation seeks to understand and tackle novel challenges posed by IT and AI-enabled transformations and how such transformation impacts organizational and market processes. The dissertation consists of three studies, which can be organized into the dark and bright sides of IT Innovations. The first two studies are devoted to the dark side, focusing on the economics of social media manipulation. These studies aim to understand the impact, underlying mechanisms, and prevention of social media manipulation. The third study is devoted to the bright side, with a focus on how AI/business analytics transforms/empowers the venture capital market. In the first study, I use the game theoretic modeling method to analyze the influencer’s fake accounts purchasing behavior in the influencer economy and demonstrate why the fake account problem is prevalent despite the platform’s effort to prevent and remove fake accounts. In the second study, I examine the fake accounts used to impersonate social media influencers and the effect of verification services on impersonation. I build a game theoretical model to analyze whether a social media platform’s paid verification process can effectively prevent impersonation and protect consumers from being misled on social media, and whether it is in the platform’s best interests to provide such paid verification services. In the third study, I use econometric methods to causally identify the impact of a venture capital firm’s adoption of an AI-empowered investment strategy on its investment success and on various biases in the investment decision-making processes.