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Alex Farach

Publications and source records attributed to Alex Farach.

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Scaffolding Human-AI Collaboration: A Field Experiment on Behavioral Protocols and Cognitive Reframing

Organizations have widely deployed generative AI tools, yet productivity gains remain uneven, suggesting that how people use AI matters as much as whether they have access. We conducted a field experiment with 388 employees at a Fortune 500 retailer to test two scaffolding interventions for human-AI collaboration. All participants had access to the same AI tool; we varied only the structure surrounding its use. A behavioral scaffolding intervention (a structured protocol requiring joint AI use within pairs) was associated with lower document quality relative to unstructured use and substantially lower document production. A cognitive scaffolding intervention (partnership training that reframed AI as a thought partner) was associated with higher individual document quality at the top of the distribution. Treatment participants also showed greater positive belief change across the session, though sensitivity analyses suggest this likely reflects recovery from carry-over effects rather than genuine training-induced shifts. Both findings are subject to design limitations including an AM/PM session confound, differential attrition, and LLM grading sensitivity to document length.

econ.GN

AI as Coordination-Compressing Capital: Task Reallocation, Organizational Redesign, and the Regime Fork

Task-based models of AI and labor hold organizational structure fixed. We introduce agent capital: AI that reduces coordination costs, expanding spans of control and enabling endogenous task creation. Five propositions characterize how coordination compression affects output, hierarchy, manager demand, wage dispersion, and the task frontier. The model generates a regime fork: the same technology produces broad-based gains or superstar concentration depending on who benefits from coordination compression. Simulations with heterogeneous workers confirm sharp regime divergence. Economy-wide inequality falls in all regimes through employment expansion, but the manager-worker wage gap widens universally. The distributional impact hinges on who controls organizational elasticity.

econ.GN

Evolving the Productivity Equation: Should Digital Labor Be Considered a New Factor of Production?

As the digital economy grows increasingly intangible, traditional productivity measures struggle to capture the true economic impact of artificial intelligence (AI). AI systems capable of cognitive work significantly enhance productivity, yet their contributions remain obscured within the residual category of Total Factor Productivity (TFP). This paper explores whether it is time for a conceptual shift to explicitly recognize "digital labor," the autonomous cognitive capability of AI, as a distinct factor of production alongside capital and human labor. We outline the unique economic properties of digital labor, including scalability, intangibility, self-improvement, rapid obsolescence, and elastic substitutability. By integrating digital labor into growth models (such as those by Solow and Romer), we demonstrate strategic implications for business leaders, including new approaches to productivity tracking, resource allocation, investment strategy, and organizational design. Ultimately, treating digital labor as an independent factor offers a clearer view of economic growth and helps organizations manage AI's transformative potential.

econ.TH