Understanding the Choice of Human Resource and the Artificial Intelligence: 'Strategic Behavior', and the Existence of the Industry Equilibrium

Abstract

Artificial Intelligence has become an input to the production of goods and services. Therefore, a general question is there that "How the labor hour/human resource will be replaced by the artificial intelligence?". To answer this question the paper considers that both artificial intelligence and the human resources are the inputs to the firm and explains the choice between the two with reference to the Customer Relationship Management. The paper derives the individual firm's and the industry demand functions of the artificial intelligence and the human resources when both are present in the production of the identical or closely related goods and services. Moreover, the paper also shows the strategic behavior of an individual firm with the industry in selecting the artificial Intelligence and the human Resources. It has been shown that the individual firm's choice in the industry depends on the choice of the industry leader. The paper explains the super modular game between the firms in an industry.