Generative AI and cognitive biases in strategic decision-making

In this article, we examine how generative AI (GenAI) influences cognitive biases in strategic decision-making by focusing on cognitive processing as the underlying mechanism. We argue that GenAI use reshapes how decision-makers construct, compare, and evaluate alternatives, with consequences for anchoring, confirmation, and overconfidence biases. Using a randomized laboratory experiment in which 273 business professionals completed a time-constrained, high-uncertainty market-entry task, we find a curvilinear relationship between GenAI use and biases: intermediate levels of use are associated with stronger cognitive processing and lower biases, whereas both low and high levels yield weaker outcomes. This relationship is conditioned by qualitative engagement, which determines whether GenAI outputs are critically interrogated and compared—sustaining deliberation and reducing bias—or accepted with limited scrutiny, which weakens these effects. Our findings highlight how GenAI reorganizes evaluative processes and shapes bias in strategic judgment.