Strategic Interactions in Organizational Decision-Making: An Experimental Study on Informational Spillovers and Generative AI Advice

• Applicant: Professorin Dr. Alicia von Schenk
• Subject Area: Economic Policy, Applied Economics
• Term: since 2024
• Project identifier: Deutsche Forschungsgemeinschaft (DFG) - Project number 547972704

This research project relies on economic online experiments to investigate the decision-making processes in the context of the exploration-exploitation dilemma, a fundamental challenge in organizational strategy. First, the focus is on understanding the efficiency in decision-making when observing counterparts who face the same setting, featuring the choice between opting for a safe alternative and the risky search for a potentially superior alternative. By empirically examining correlated and uncorrelated decision scenarios, the aim is to identify the impact of strategic interactions through dualistic informational spillover effects – positive knowledge diffusion through enhanced self-assessment of the own strategy’s efficiency vs. negative free riding dynamics on the exploration efforts of others. Second, recent developments, particularly in large language models and generative artificial intelligence (AI), have created new opportunities for guiding and supporting strategic decision-making. Interacting with these algorithms in the role of a sparring partner or advisor could change decisions in the exploration-exploitation dilemma. The aim is to systematically understand the nuanced role of this technology, functioning both as a facilitator of the reflective process through requiring the writing of tailored prompts and as a generator of knowledge and ideas. The investigation extends to analyzing how generative AI influences experimentation in scenarios characterized by the presence or absence of strategic interactions.

• DFG Programme: Research Grants
• Co-Investigators: Professor Dr. Victor Klockmann; Professor Dr. Ferdinand von Siemens