STRATEGY AND BUSINESS ECONOMICS


Additive vs. subtractive earning in shared human-robot work environments


ORI HEFFETZ PROFESSOR


Samuel Curtis Johnson Graduate School of Management


Cornell SC Johnson College of Business Cornell University


Journal of Economic Behavior and Organization, 217, January 2024 LINK TO PAPER LINK TO ORI HEFFETZ VIDEO


Co-authors • Ori Heffetz


Professor, Samuel Curtis Johnson Graduate School of Management, Cornell SC Johnson College of Business, Cornell University


• Bnaya Dreyfuss, Harvard University, Massachusetts • Guy Hoffman, Sibley School of Mechanical and Aerospace Engineering, Cornell University


• Guy Ishai, Hebrew University of Jerusalem, Israel • Alap Kshirsagar, Sibley School of Mechanical and Aerospace Engineering, Cornell University


Summary Te performance of robots working alongside humans might positively or neg-


atively affect human earnings, depending on the economic setting. In a new real-effort lab experiment, the authors study the impact on human workers’ ef- fort and attitudes as they relate to the economic conditions in their human-ro- bot hybrid workplaces. A previous subtractive-earnings experiment showed that subjects’ expected earnings negatively depend on a robot’s performance, while in this new additive-earnings experiment, they depend on the robot’s performance positively.


Both experiments are guided by a past human-human experiment and by a model of expectations-based reference-dependent preferences. As the theory predicts and as previously found, increasing robot performance discourages effort under subtractive earnings—but the authors predict and find that this effect disappears and perhaps reverses under additive earnings. Additionally, increasing robot performance negatively affects subjects’ perceptions of them- selves and of their robotic coworker under subtractive earnings, but they find that these effects weaken or reverse under additive earnings. Tese findings suggest a relationship between workers’ earning structures and robots’ perfor- mance that should be considered when designing hybrid workplaces.


CONTENTS TO MAIN | RESEARCH WITH IMPACT: CORNELL SC JOHNSON COLLEGE OF BUSINESS • 2024 EDITION 57


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