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Title: Data, Power and Emissions: The Environmental Cost of AI
(Alessandra Bonfiglioli, Rosario Crinò, Mattia Filomena, Gino Gancia)

Abstract: We study the environmental impact of artificial intelligence (AI) using a novel dataset that links measures of AI penetration, the location of data centers and power plants, and CO2 emissions across US commuting zones between 2002 and 2022. Our analysis yields four main findings. First, exploiting a shift–share identification strategy, we show that localities more exposed to AI experience relatively faster emissions growth. Second, decomposition results indicate that scale effects dominate, while changes in industrial composition exert at most a weak mitigating effect; at the same time, electricity generation becomes more carbon intensive. Third, AI penetration raises dependence on non-renewable electricity. Fourth, proximity to data centers is a key driver of this effect, as nearby power plants shift toward greater fossil fuel use. These findings suggest that, absent a rapid decarbonization of power generation, the diffusion of AI is likely to exacerbate environmental externalities through the energy demand of data centers.

This presentation will cover the material of two related papers on organizational sabotage and unintended consequences of policy tools.

Title: Optimal Deterrence of Workplace Sabotage: The Unintended Consequence of Intermediate Fines
(Subhasish M. Chowdhury, Iryna Topolyan) 

Abstract: We investigate the effects of punitive fines on sabotage behavior in organizations. We consider a two-stage Tullock contest in which agents exert productive effort in the first stage. In the second stage, they can diminish the effort of the opponent by incurring a sabotage, which is costly due to a possible fine. This structure is common in the field, but new to the literature. We fully characterize the equilibria and show that sabotage decreases with an increase in the fine level. However, the effect of fine on effort as well as on payoff are non-monotonic. As an unintended consequence, for an intermediate level of fine the total effort and total payoff may decrease substantially.

Title: Organization, Sabotage, and the Unintended Consequences of Nudges on Non-targeted Behavior
(Subhasish M. Chowdhury, Joo Young Jeon, Maroš Servátka, Jiří Špalek)

Abstract: In organizational settings where relative performance is the key to success, employees often resort to sabotaging co-worker’s productive efforts. Since nudges have the potential to change people’s behavior as a cost-effective tool, we investigate experimentally the effectiveness of such a nudge – the presence of a social cue in the form of a pair of eyes – on sabotage behavior. We also examine whether the nudge effect can spill over to other domains of behavior. We find that the costless nudge indeed significantly reduces sabotage behavior. However, as an unintended consequence, it also results in a decreased productive effort. Furthermore, we find significant gender differences in the effect of the nudge. Implications for behavioral science and managerial practice are discussed.

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