L Eads Us Not into Temptation : K Nowledge

This paper explores how uncertainty reduction due to increased forecasting accuracy, which is one of main benefits associated with the adoption of Business Intelligence (BI) systems, will affect the behavior of knowledge workers and how this change in their behavior will impact the appropriation of benefits from BI investments. The study uses a micro-economic model in order to show that higher forecasting accuracy is likely to create the conditions for knowledge workers to behave in a morally hazardous fashion. The result of this opportunistic behavior is that knowledge workers can appropriate for themselves a relatively larger portion of the firm’s rents from BI investments that should accrue to firm and ultimately to external stakeholders. Studies that measure the payoffs from IT investments that enable more accurate forecasts, such as BI, are likely to underestimate the total benefits by the portion that knowledge workers will appropriate for themselves through their opportunistic behavior.