Why do we resist trusting AI recommendations? How can we improve the pricing and approval process for new health technologies? In what ways does board risk oversight impact environmental and social performance? What effect do career transitions and frictions have on performance? And how do past negative experiences with creativity influence how creative we are?
These are just some of the pressing and pertinent questions INSEAD professors have been exploring in their research. Here’s a look at what they’ve uncovered.
1.Algorithm aversion: Reducing resistance to AI advice
People often resist AI recommendations, even when AI outperforms humans. New research by Anton Ovchinnikov and his co-authors* examines the differences in recommendation adherence given by AI or human advisors, and whether allowing people to seek explanations from the advisor helps.
Through an experiment set in the online rental market (such as Airbnb), they found that people are less likely to follow recommendations which they view as a “loss,” but this effect was dampened if the advice is given by an AI. Surprisingly, seeking explanations for recommendations had little impact on whether people accepted the advice, suggesting that explanations may not always improve decision adherence.
*Tracy Jenkin and Cecilia Ying from Queen’s University and Stephanie Kelley from Saint Mary’s University.
2. Rethinking health technology pricing
Health technology assessments are an important part of deciding whether or not to approve new health technologies – including cancer treatments – and can inform price negotiations for approved technologies.
Stephen Chick and his collaborators* model an important mechanism to approve the health value and pricing of new health technologies: conditional approval (CA) schemes. These allow new health technologies to be approved at a provisional price while further trials address uncertainties in cost-effectiveness of the new technology before a final price is set. The researchers show when and how CA schemes can be used to better inform pricing decisions and propose a new risk-sharing scheme to encourage health innovations to be brought to market.
*Özge Yapar from Indiana University and Noah Gans from The Wharton School.
3. How board risk oversight impacts E&S performance
Firms with more extensive board risk oversight are more likely to institute environmental and social (E&S) compensation, set environmental goals, adopt policies addressing E&S risks and publish E&S reports, according to new research by INSEAD professors Hami Amiraslani and Thomas Keusch and their co-authors*.
However, while companies with active board oversight show improved environmental performance, such as reduced environmental costs, they have weaker social outcomes, including poorer employee benefits. These findings suggest that boards prioritise environmental risks over social ones when conducting risk oversight.Top of FormBottom of Form
*Carolyn Deller and Christopher Ittner from The Wharton School.
4. How “career frictions” shape performance and creativity
When people change jobs, they often encounter career frictions – the challenges that arise as they adapt their skills and experiences to a new role. These frictions can either hinder performance or spark creativity and open new pathways to enhanced performance.
In a new paper, Gina Dokko from the University of California and INSEAD’s Winnie Jiang introduce a model explaining how individual traits (like cognitive fixedness) and workplace practices (like socialisation) influence the ability to translate prior expertise into creative performance in a new role.
5. The impact of “creativity scars” on future creativity
For many people, childhood experiences can create “creativity scars” – negative associations with creativity caused by emotional harm from past creative attempts. These scars often make them feel as though they cannot be creative again.
A study by INSEAD’s Spencer Harrison and Derek Deasy, along with Mel Hua from University of Warwick, identifies two types of creativity scars: childhood and professional. These scars, which emerge at different points in life, reveal how people understand and relate to creativity. They also explore the distinct long-term effects of each type of creativity scar.
“INSEAD, a contraction of “Institut Européen d’Administration des Affaires” is a non-profit graduate-only business school that maintains campuses in Europe, Asia, the Middle East, and North America.”
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