Buying the Right to Monitor:Editorial Design in AI-Assisted Peer Review

TL;DR

This paper models how generative AI disrupts academic peer review, causing a sudden drop in reviewer effort and leading to counterintuitive policy recommendations for journal editors.

Contribution

It develops a three-sided equilibrium model revealing the impact of AI on reviewer effort and proposes optimal policy adjustments before and after AI capability thresholds.

Findings

Reviewer effort collapses when AI crosses a critical threshold.

Editors should tighten standards before AI transition and loosen them afterward.

Loosening standards post-transition improves signal quality and reduces dissipative polishing.

Abstract

Generative AI acts as a disruptive technological shock to evaluative organizations. In academic peer review, it enters both sides of the market: authors use AI to polish submissions, and reviewers use it to generate plausible reports without exerting evaluative effort. We develop a three-sided equilibrium model to analyze this dual adoption and derive a counterintuitive managerial implication for journal policy. We show that when AI capability crosses a critical threshold, reviewer effort collapses discontinuously. This transition creates a welfare misalignment: authors benefit from a weakened ``rat race,'' while editors suffer from degraded signal informativeness. Characterizing the editor's optimal constrained response, we identify a strict policy reversal. Before the AI transition, editors should tighten acceptance standards to curb rent-dissipating author polishing. After the transition, conventional intuition fails: editors must loosen acceptance standards while investing in AI detection, because further tightening only amplifies dissipative polishing without improving sorting. We prove analytically that this sign reversal is a structural consequence of the reviewer effort collapse under log-concave quality distributions. Ultimately, addressing AI in evaluative systems requires treating monitoring and loosened selectivity as complementary design instruments.