"Better Technology, Worse Motivation: Gen AI's Mediocrity Trap" with Yvonne Jie Chen, Jin Li and Zibo Zhao, October 2025, revise and resubmit at Management Science.
Mentioned in: Economist
Abstract: While generative AI (GenAI) promises productive efficiency, it can paradoxically lead to lower-quality work. We conducted an experiment with professional illustrators and found that AI assistance flattens the quality curve—it accelerates initial gains but sharply diminishes the returns on sustained effort. Faced with this, a significant number of professionals made a strategic choice: they sacrificed the final quality to save time. Our finding highlights a critical challenge for GenAI, which can weaken the motivation required for creative excellence and innovation.
"The Value of Local Knowledge in Service Work" with Xiao'ou Liu, Ang Sun and Huili Zhang, September 2025, revise and resubmit at Management Science.
Abstract: Many service tasks appear mechanical, yet automating them can destroy value. We study this puzzle through the lens of local knowledge—the contextual, real-time information that workers gather through direct observation and interaction. A large restaurant chain experienced an unexpected system failure, forcing its outlets to switch from digital ordering to full human service. We leverage this natural experiment to examine how servers use two types of local knowledge that automated systems cannot easily access: real-time customer characteristics and product knowledge that allows credible, tailored recommendations. We find that human servers increase revenue per order by 6.5% compared to digital systems. These gains come from strategic use of local knowledge: they promote signature and high-margin items, and adjust strategies to context–recommending premium dishes to small groups, expanding quantities for larger groups, scaling back upselling during busy periods, and generating greater revenue in tourist areas where customers are less familiar with the menu. Our findings show that decentralized decision-making based on local knowledge creates value that centralized automated systems cannot match.
"Traineeships and the Labor Market Experiences and Expectations of College Graduates" with Jessica Pan and Basit Zafar, Working paper, Dec 2025.
Abstract: This paper evaluates the impacts of a large-scale traineeship program on the labor market expectations and experiences of Singaporean college students graduating during the pandemic-induced recession, focusing on students’ perceived ex ante and ex post treatment effects. Specifically, we collect novel data at different time points to recover subjective treatment effects of the traineeship program by collecting information on students’ perceived/realized labor market outcomes, as well as their perceived outcomes in hypothetical counterfactual states, such as in the absence of the traineeship program or the economic downturn itself. We find that graduates anticipate significant negative labor market effects from the economic downturn that persist until age 35; nevertheless, ex ante, they expect the traineeship program to substantially mitigate these impacts on full-time employment, income, and job satisfaction. These perceived treatment effects persist in a follow-up survey conducted two years after graduation. Interestingly, both traineeship participants and non-participants expect, on average, positive effects from the program’s existence, suggesting little evidence of perceived crowd-out effects. Finally, we also elicit perceived participation effects and find that graduates self-select into the scheme based on expected gains.
"When Less is More: Usage Mandates and Gaming in AI Adoption" with Jiayi Hou, Jin Li, Fei Pu and Xinjue Yao. (draft coming soon!)
Abstract: Firms increasingly mandate AI usage, but do these mandates produce genuine adoption? We study a large medical-device company that imposed a monthly minimum of 200 AI queries per employee, later reduced to 100. Using complete query logs, we distinguish genuine work use from low-effort compliance. We find that under the 200-query target, employees bunch at exactly the threshold and back-load usage to month-end; when the target drops to 100, bunching shifts to the new threshold and the end-of-month surge attenuates. Exploiting the staggered rollout across branches, we show that lowering the mandate decreases query volume by 37\% but improves quality: fewer repeated queries, higher work relevance, and a 7% increase in sales among sales employees. The mandate also activates previously inactive users, particularly under the lower target. These findings suggest that the composition of AI usage, not just its level, determines whether mandated adoption creates value.
"Organization DNA: Knowledge Transmission through Mentorship Chains" with Jiang Bian, Feiyong Ke, Jin Li and Zhiwei Shang. (draft coming soon!)
Abstract: How do organizations transmit and replicate the tacit knowledge that underlies competitive advantage across successive generations of workers? We investigate this question by studying formal mentorship in a Chinese commercial bank, where incoming loan officers are quasi-randomly assigned to experienced mentors. Drawing on the knowledge-based view and knowledge transfer literature, we develop predictions about how mentor characteristics shape transfer effectiveness, durability, and cross-generational propagation. We find that mentor productive expertise substantially increases mentee performance, with effects persisting beyond the formal mentorship period, consistent with genuine human capital acquisition. Knowledge cascades through mentorship chains: first-generation mentor quality predicts second-generation mentee performance despite no direct interaction between them. Productive expertise and hierarchical rank interact asymmetrically: rank amplifies the effect of expertise, but rank without expertise is associated with lower mentee performance. Mechanism tests rule out direct assistance and document the transmission of specific work practices. We contribute to the knowledge transfer literature by establishing mentor quality as a micro-foundation of transfer effectiveness, demonstrating that mentorship can function as a self-replicating organizational knowledge mechanism.