What 'Cheap Prediction' means for Enterprise?
Joshua Gans
Economist and co-author of Prediction Machines
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Season 7 Episode 3
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Joshua Gans, economist and co-author of Prediction Machines (and holder of the Skoll Chair in Technical Innovation and Entrepreneurship at the Rotman School of Management, University of Toronto) joins Robb and Josh to reframe how enterprise leaders should think about AI. Rather than chasing the hype around artificial intelligence, Gans argues we should understand AI as an advance in computational statistics that drops the cost of prediction, reduces decision-making friction, and fundamentally reshapes organizational structure.
Many organizations are full of people waiting for phones to ring, managing buffers, absorbing uncertainty. As AI makes prediction cheap, this middle-management friction layer flattens. His new book, The Microeconomics of Artificial Intelligence, examines the ways AI enhances and perhaps enables decision-making, and how that’s poised to affect organizations and industries. The trio discusses the “hidden secret” of AI adoption that the people who choose the systems used to automate work are essentially “selecting their usurper.” While AI will eliminate friction and flatten hierarchies, it will supercharge frontline workers rather than replace them.
Forbidding employees from experimenting with AI tools and pushing adoption underground prevents the learning curve needed for proficiency. For leaders navigating AI adoption, this conversation offers a clearer lens: stop thinking about intelligence, start thinking about prediction costs, friction reduction, and the organizational restructuring required to actually capture value. True AI transformation isn’t about deploying models, it’s about redesigning decision-making architecture across the enterprise.
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About the guest
Joshua Gans is the co-author of Prediction Machines and Power and Prediction, which explore the economics of AI. As an economist, he studies innovation, entrepreneurship, and business strategy, focusing on how firms and markets adapt to technological change, with particular emphasis on artificial intelligence. He is the Jeffrey S. Skoll Chair of Technical Innovation and Entrepreneurship and Professor of Strategic Management, Rotman School of Management, University of Toronto. Gans also serves as the Chief Economist of the Creative Destruction Lab and is the co-founder of All Day TA. He holds honorary appointments in the Department of Economics and Munk School, University of Toronto, and Melbourne Business School and is a Fellow of the Academy of Social Sciences, Australia and the Royal Society of Canada.
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