As part of the series of the „Finance Research Seminar“, VGSF welcomes Jean Edouard Colliard from HEC Paris to present his research paper.
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Paper
Artificial Intelligence and the Rents of Finance Workers
joint with Junli Zhao
This paper studies how artificial intelligence (AI) affects the finance labor market when humans and AI perform different tasks in investment projects, and workers earn agency rents that grow with project size. We identify two key effects of AI improvement: A freeriding effect raises worker rents by increasing the probability of successful investment when the worker shirks; A capital reallocation effect shifts investment toward workers with higher or lower rents, depending on which tasks AI improves. Contrary to standard predictions, AI can raise both worker rents and labor demand. We derive implications for capital allocation, labor demand, compensation, and welfare.
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