Advances in digital technology have changed the world as we know it—and show no sign of slowing down. As research investigates the longer-term risks, rewards, and systemic effects of technologies like Artificial Intelligence, development speeds on, altering the landscape of how we work, talk to each other, buy and sell, and even what we eat.
How is new digital technology, like AI and cryptocurrency, driving change in certain sectors, from customer-service interactions to getting food from farm to table? In the past several months, Delve has talked with researchers at the McGill Desautels Faculty of Management who investigate the impact of new digital technologies on the world of work, multiple global industries, and financial markets.
- What can be learned from people’s reactions to emotionally expressive AI technology like chatbots in customer service and other areas?
- Could Central Bank Digital Currencies (CBDC) improve the banking and financial sectors—and offer stronger protection for privacy and security?
- Who wins and who loses when investing in cryptocurrency through yield farms, where the risks and returns are often unclear?
- Will AI technologies transform the global agri-food sector enough for it to reach net-zero emissions by 2050?
Logically everyone knows that software doesn’t have feelings, but AI chatbots that express emotion—as well as other advanced artificial intelligence tools like Google AI’s chatbot and ChatGPT—have a sentient quality that places them somewhere between machine and human. How do customers feel when greeted with a “happy” chatbot?
Conventional customer service wisdom shows that when human employees express positive emotion, customers give higher evaluations of the service. But when emotionally expressive chatbots enter the equation, people’s feelings change. Positive, negative, or neutral, customers’ reactions vary in accordance with their expectations of customer service.
Research by Desautels professor Elizabeth Han investigates the effects of AI-powered chatbots that express positive emotion in customer service interactions. In theory, making software appear more human and emotionally upbeat sounds like a great idea, but in practice, as Han’s research shows, most people aren’t quite ready to make a cognitive leap across the uncanny valley.
How can they express emotion when they cannot feel the emotion?
“We found out that if a chatbot expresses positive emotion, it disconfirms people’s expectation. And what kind of expectation? The expectation that machines cannot feel emotion,” says Han. “How can they express emotion when they cannot feel the emotion? There’s this cognitive dissonance coming from that violation of expectation—and that’s actually causing a negative impact on the customers’ evaluation of the service. It’s like those two competing mechanisms cancel out each other out.”
Listen to the Delve podcast and read the article for more insights on emotionally expressive AI.
Central Bank Digital Currencies (CBDC) represent a possible next step in the technological evolution of banking and the financial intermediation sector, with advances in privacy, fraud protection, and efficiency—but their roles and risks on the high-tech path forward are only now becoming clear.
Many central banks are considering issuing a CBDC, but they have not made their decisions yet.
Some of the world’s largest economies are considering issuing a Central Bank Digital Currency, a digital form of a country’s currency that could be used to make online and mobile payments, and many smaller countries have already adopted one. Issued by a central bank, CBDCs could provide features that other forms of payment can’t, including superior privacy protections and anti-money laundering features.
Academics, policymakers, and private sector experts recently debated the future of CBDCs at the Desmarais Global Finance Lecture on the topic of “Central Bank Digital Currencies and Alternative Payment Systems” at Desautels. Speakers included head of the Toronto Centre of the Bank of International Settlements Innovation Hub Miguel Díaz and Stanford Professor Darrell Duffie.
“We wanted to bring together a variety of perspectives,” says Katrin Tinn, a Desautels professor of Finance who specializes in digital currencies and co-organized the event with the director of the Desmarais Global Finance Research Centre and Desautels professor, David Schumacher.
“Many central banks are considering issuing a CBDC, but they have not made their decisions yet,” says Tinn. The events brought together multiple opinions from Canada, the United States, and internationally to present a global view of what successful CBDCs could look like.
For research-based insights on the future of Central Bank Digital Currencies, read the Delve article.
If something seems too good to be true, it probably is. Add cryptocurrency yield farms to that list. A complex investment strategy in decentralized finance markets, yield farming advertises eye-popping passively earned returns. While some investors boast impressive returns, for others the risks are unclear or even undisclosed before they invest, and the advertised returns never materialize.
New research by Desautels Professor Patrick Augustin investigates the risks to investors chasing high yields in decentralized finance markets.
The risks in yield farming are not very transparent.
“The risks in yield farming are not very transparent,” says Augustin “On average, the farms in our sample advertised yields of about 78 per cent, but investors don’t always know the risks or how to maximize returns… People chase the yields, but the farms that advertise the highest yields systematically underperform. Their higher risk doesn’t actually pay off.”
Yield farms are decentralized finance platforms in which transactions are made through smart contracts—bits of computer code that execute automatically when certain conditions are met. Unlike in traditional markets, these transactions occur directly between parties. In research paper “Reaching for Yield in Decentralized Financial Markets,” Augustin analyzed trades from a colourful yield farm platform called PancakeSwap. On top of that, most investors don’t stake claims on the blockchain so don’t see their risks pay off.
For more insights on investment in cryptocurrency yield farms, read the article on Delve.
One of the largest contributors to climate change worldwide, the agricultural food supply chain crosses international borders and reaches across industries and sectors. Reducing its environmental impact requires complex, high-tech solutions like artificial intelligence—and the people to implement them at the right time, in the right places.
How can we co-design, implement, and monitor lasting multiscale intervention strategies?
How can the food supply chain industry act as an entry point to reach decarbonization and net-zero emissions by 2050? The Desautels Faculty of Management Sustainable Growth Initiative (SGI) and the McGill Centre for the Convergence of Health and Economics (MCCHE) recently welcomed scholars and business representatives to discuss the role of artificial intelligence technologies and collaborative digital ecosystems in transforming the agri-food sector.
“How can we co-design, implement, and monitor lasting multiscale intervention strategies that explicitly consider multilevel and multi-entity capabilities, resources, and interests?” says Laurette Dubé, Desautels professor and founder of the MCCHE, setting the tone for a wide-ranging and vital discussion.
Find out more about the future of AI in the agriculture sector in Delve’s article and video.