Essays on AI, Digitization, and Innovation
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This dissertation includes three chapters that study pressing issues in today's economy, focusing on artificial intelligence (AI), digitization, and innovation. The first chapter studies the impact of accumulated experience in innovation on improving additional innovations in terms of scope, scale, and cost. It studies this concept in the context of AI innovations. This is done by introducing a dynamic structural model and underpinning the underlying mechanisms of accumulated experience in innovation. The second chapter looks deeper into the impact of accumulated experience and studies the impact of accumulated experience in AI innovations on firms' profitability. This chapter applies dynamic structural modeling to examine how firms leverage their accumulated experience in AI innovations to improve their profitability. The first two chapters study how firms strategically use accumulated experience to gain competitive advantage from different aspects. The last chapter shifts the attention from technological advancements at the firm level to consumer interactions. This chapter examines how consumers' purchasing behaviors changed with the introduction of a two-hour delivery service by a major online retailer. This study highlights how online retailers could use technological advancements to increase their consumers. These chapters collectively give a comprehensive view of the impacts of the accumulation of innovation within a firm and how firms leverage innovative strategies, such as reduced delivery time, to increase their revenue. The developed models in this dissertation can be used to examine the impacts of various policies and how they may impact the market and firms' competitive position.