Leveraging digital platforms and algorithms for addressing societal challenges

Digital platforms empowered by artificial intelligence, machine learning, and profit-seeking algorithms have reinforced societal challenges such as economic inequality and overconsumption. However, can algorithms help cope with societal challenges? Lavie (2023) suggests that the design of our economic system prioritizes self-interested behavior over societal values, which is the root cause that reinforces these societal challenges. In his discussion, Lavie will explain how, by leveraging algorithms which embed design principles that promote prosocial behavior, digital marketplace platforms can enable market participants to enhance the welfare of others in their community, which pays off emotionally. The underlying design principles embed consumer, vendor and platform social responsibilities. By following these design principles, prosocial behavior can countervail opportunistic behavior in digital marketplaces. Accordingly, private sector initiatives can deploy algorithms to complement public policies that promote equality, sustainability and wellbeing.

To illustrate the application of such platforms, Lavie will share findings from a recent experiment of a prosocial market platform that enables consumers to overcome the traditional tradeoff between personal consumption and charitable giving (Lavie et al., 2026 WP). The platform induces prosociality by redistributing value from higher-earning consumers to subsidized lower-earning consumers. Whereas subsidized consumers gain economically, subsidizing consumers gain emotionally. A field experiment supports the application of the prosocial design that reduces economic inequality and increases satisfaction. The findings reveal that higher earners create sufficient value to subsidize lower earners without reducing market activity, inflating consumption, exacerbating opportunistic behavior, or substituting alternative forms of prosocial behavior, thus demonstrating the resilience of the platform that routinizes structural prosocial behavior. Accordingly, digital platforms and algorithms can be deployed for coping with societal challenges, e.g., reducing economic inequality and improving consumer welfare. Scholars are invited to theorize and test how emerging technologies such as AI can alleviate societal challenges.