Artificial Intelligence R&D Investment With Wage Bargaining in a Duopoly

ABSTRACT This study develops a duopoly model incorporating artificial intelligence (AI) R&D investment and wage bargaining to analyze firms' wage and AI investment decisions. The main findings are as follows: First, bargaining power and AI R&D investment efficiency affect equilibrium results regardless of bargaining function forms. Second, bargaining modes influence how AI R&D investment affects wages and firm behavior. Third, AI R&D investment decisions are jointly determined by bargaining mode, bargaining power and R&D investment efficiency. When high‐skilled labor and AI investment exist a complementary effect, worker welfare and social welfare remain unchanged under different bargaining modes.