From Token-Max to Outcome-Max: How You Use AI Determines Its Productivity

arXiv:2610.05697v1 Announce Type: new Abstract: Generative artificial intelligence (AI) models can perform increasingly complex tasks, yet greater AI usage does not necessarily translate into proportional productivity gains. We identify token-max as one source of this inefficiency: when token consumption is treated as productive effort, agents are encouraged to over-exert and expend computation beyond what is necessary. We instead propose outcome-max, which rewards independently verified task completion per unit cost and induces a principled stopping rule. Then, to study these objectives, we develop a three-level simulation framework spanning immediate interaction, long-run behavioral adaptation, and organizational collaboration. Across all three levels, outcome-max improves the efficiency of AI-assisted production while largely preserving verified task performance. To further align these incentives with outcome-max, we introduce OutcomeShare, an incentive mechanism. Theory and simulation show that OutcomeShare can induce participation while generating shared gains for employees, firms, and LLM providers. Together, our results suggest that AI productivity not only depends on model capability, but also on how to construct the objectives governing AI use.