---
id: "lib-2026-09-26-when-less-is-more-managing-ai-adoption-with"
type: "library"
title: "When Less Is More: Managing AI Adoption with Adaptive Incentive Design"
lang: "EN"
org: "arXiv (HKU et al.)"
source_type: "Paper"
date: "2026-09-26"
week: "2026-W42"
url: "https://nosov.ai/library/lib-2026-09-26-when-less-is-more-managing-ai-adoption-with/"
original_url: "https://arxiv.org/abs/2609.32859"
tier: "A"
tier_name: "Strong evidence"
tier_reason: "University of Hong Kong economists use full query logs and a staggered branch-level policy change inside one firm to give causal, checkable evidence on what an AI usage quota produces."
summary_basis: "full-text"
original_minutes: "50"
tags: ["work and ai", "adoption mandates", "incentives", "field evidence"]
---

# When Less Is More: Managing AI Adoption with Adaptive Incentive Design

Tier A (Strong evidence): University of Hong Kong economists use full query logs and a staggered branch-level policy change inside one firm to give causal, checkable evidence on what an AI usage quota produces.

Summary based on the full text.

## In short

An arXiv working paper (26 September 2026) by Jie Gong, Jiayi Hou, Jin Li, Fei Pu and Xinjue Yao. A Chinese medical-device maker told about 5,000 non-production staff to send at least 200 queries a month to its internal assistant, with fines for missing it. First-time use jumped, and so did gaming: counts bunched at 200 and almost a third of queries were filler. When the target was lowered to 100, branch by branch at different times, volume fell 30%, nearly all of it filler, and sales rose 7%.

## Key numbers

- 31 percent: share of queries that were repeated or off-task under the 200-queries-a-month mandate
- 30 percent: drop in monthly query volume after the target was cut from 200 to 100
- about 90 percent: share of that drop made up of repeated or off-task queries
- 7 percent: increase in monthly sales among sales staff after the lower target
- 14.8%: staff who had used the AI assistant before the mandate

## What it reports

- Before the mandate only 14.8% of staff had used the tool; 31.2% used it for the first time in the first mandate month and 9.1% more the next.
- Under the 200-query target, among users 12% sent exactly 200 and 95% sent no more than 220. 31% of queries were repeated, personal or off-task, and activity surged near month end.
- After the cut to 100, low-quality queries fell from 31% to 18% and the month-end surge softened.
- Staggered estimates: monthly volume down 29 queries (30% of the mean); about 90% of the decline was repeated or off-task use; the change in non-repeated, work-related queries was small and not significant.
- Sales staff, the only group with individual output data, raised monthly sales by 7%, with flat pre-trends.
- Employees whose use had clustered near 200 reacted most; even pre-mandate users cut low-quality queries, so the quota induced gaming among willing users too.

## How they got it

The firm (pseudonym MedTech Corp, about 9,000 staff in 46 branches) logged the full text and timestamp of every query to a DeepSeek-based assistant fine-tuned on internal documents. Logs were linked to personnel and sales records, March-December 2025. Headquarters lowered the target in July 2025 by memo; 19 branches switched at once, others later, 15 kept 200 through December. That staggered adoption across 42 branches supports difference-in-differences and event-study estimates. Query content was classified into work-related, repeated and off-task categories.

## Limits

- One firm in China with a specific penalty regime (fine of RMB 200, about 2% of monthly pay).
- Branch timing was not random; it reflected how local HR read a memo, which may correlate with branch traits.
- Performance is observed only for sales staff.
- Query-quality classification is the authors' own scheme.

## Why it matters for companies

Usage quotas produce usage, and a large share of it is noise that inflates adoption dashboards. This paper measures the size of that noise and shows that a lower target removed filler without cutting real work, while output rose. Firms tracking prompts or active seats as success should audit query content before setting or raising targets. A mandate can start adoption, but it needs a planned review point and a measure tied to work output.

Original: https://arxiv.org/abs/2609.32859