Automated decision-making

Abstract

Purpose This paper aims to analyse three decision-making approaches that involve humans and artificial autonomous agents, namely, human “in the loop”, “on the loop” and “out of the loop” and identifies the decision characteristics that determine the choice of a decision-making approach. Design/methodology/approach This is a conceptual paper that analyses the relationships between the human and the artificial autonomous agents in the decision-making process from the perspectives of the agency theory, sustainability, legislation, economics and operations management. Findings The paper concludes that the human “out of the loop” approach is most suitable for quick, standardised, frequent decisions with low negative consequences of a wrong decision by the artificial intelligence taken within a well-defined context. Complex decisions with high outcome uncertainty that involve significant ethical issues require human participation in the form of a human “in the loop” or “on the loop” approach. Decisions that require high transparency need to be left to humans. Originality/value The paper evaluates the decision-making approaches from the perspectives of the agency theory, sustainability, legislation, economics and operations management and identifies the decision characteristics that determine the choice of a decision-making approach.

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