AI’s Use of Knowledge in Society

2026

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AI-generated summary

1) This paper re-examines Hayek's critique of central planning in light of transformative AI, proposing a framework where AI's ability to codify knowledge and process information determines the optimal allocation of decision rights and ownership, potentially leading to increased centralization.
2) * Explores how AI can codify and transfer knowledge, challenging Hayek's argument about dispersed local knowledge.
* Analyzes how AI's increased information processing capacity enables greater integration and coordination across larger scales.
* Develops a property rights framework to understand the implications of AI on decision rights and ownership, leading to predictions about firm size, industry concentration, and managerial autonomy.
3) AI, Knowledge, Centralization, Decentralization, Economics

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