Prediction Machines | Ajay Agrawal, Joshua Gans & Avi Goldfarb

Prediction Machines: The Simple Economics of Artificial Intelligence

Extended Synopsis

Artificial intelligence often seems like magic, bringing machines to life to drive cars, trade stocks, and automate complex processes. However, in Prediction Machines, three eminent economists lift the curtain on the hype to reveal a surprisingly simple economic framework: the rise of AI is fundamentally a drop in the cost of prediction. By reframing artificial intelligence as cheap and accessible prediction, the authors provide immense clarity for navigating this technological sea change.

This updated and expanded edition demonstrates how prediction is at the heart of making decisions amid uncertainty. As prediction tools increase productivity across operations and customer communication, they generate opportunities for entirely new business strategies. With new material exploring how prediction fits into existing decision-making workflows and how foundational technologies like quantum computing will impact business choices, this book is an essential map for understanding the ongoing AI revolution.

About the Authors

Ajay Agrawal, Joshua Gans, and Avi Goldfarb are eminent economists and professors at the Rotman School of Management, University of Toronto. Together, they bring extensive academic rigor and practical industry insight into how emerging technologies affect strategic management, corporate innovation, and the global economy.

Accolades & Awards

• Named one of "The five best books to understand AI" by The Economist.

Reader Targeting

• Business executives and entrepreneurs looking to implement AI strategies.
• Investors and policymakers seeking a clear economic framework for the impact of artificial intelligence.
• Students and professionals in economics, strategic management, and technology sectors.

Bibliographic & Physical Specifications

Frequently Asked Questions

What is the core premise of Prediction Machines?
The authors argue that the fundamental economic shift caused by artificial intelligence is a drastic reduction in the cost of prediction, which in turn transforms how businesses strategize and operate.

Is this book highly technical?
No, the book provides a clear economic framework accessible to business professionals, cutting through the hype of AI to offer actionable insights rather than dense programming knowledge.

What is new in this updated and expanded edition?
This edition includes new material explaining how prediction fits into existing decision-making processes and the potential business impact of foundational technologies like quantum computing.