Predictive AI is increasingly used to guide decisions on agents. I show that even a bias-neutral predictive AI can potentially amplify exogenous (human) bias in settings where the predictive AI represents a cost-adjusted precision gain to unbiased predictions, and the final judgments are made by...

I conduct an investment screening performance benchmarking between 111 venture capital (VC) investment professionals and a supervised gradient boosted tree (or “XGBoost”) classification algorithm to create trust in machine learning (ML)-based screening approaches, accelerate the adoption...

Despite the massive dollars invested each year by VC firms, more than two-thirds of the companies they fund will provide zero return. More problematic, less than 3% of VC funds go to female-led startup teams, and less than 1% go to racially diverse founders. While many argue that this...

Venture capitalists not only finance but also advise and thereby add value to young innovative firms. The prospects of venture capital backed firms thus depend on joint efforts of entrepreneurs and informed venture capitalists, and are subject to double moral hazard. In financing a portfolio of...

The relationship between a venture capitalist and an entrepreneur is modeled to investigate the impact of public subsidies on venture capital investments in start-up enterprises. In this model, the venture capitalist only finances start-up enterprises if he has sufficient expertise to make...