Abstract

http://ssrn.com/abstract=2466040
 


 



Algorithm Aversion: People Erroneously Avoid Algorithms after Seeing Them Err


Berkeley J. Dietvorst


The University of Chicago Booth School of Business; University of Pennsylvania - The Wharton School

Joseph P. Simmons


University of Pennsylvania - The Wharton School

Cade Massey


University of Pennsylvania - The Wharton School

July 6, 2014

Forthcoming in Journal of Experimental Psychology: General

Abstract:     
Research shows that evidence-based algorithms more accurately predict the future than do human forecasters. Yet, when forecasters are deciding whether to use a human forecaster or a statistical algorithm, they often choose the human forecaster. This phenomenon, which we call algorithm aversion, is costly, and it is important to understand its causes. We show that people are especially averse to algorithmic forecasters after seeing them perform, even when they see them outperform a human forecaster. This is because people more quickly lose confidence in algorithmic than human forecasters after seeing them make the same mistake. In five studies, participants either saw an algorithm make forecasts, a human make forecasts, both, or neither. They then decided whether to tie their incentives to the future predictions of the algorithm or the human. Participants who saw the algorithm perform were less confident in it, and less likely to choose it over an inferior human forecaster. This was true even among those who saw the algorithm outperform the human.

Number of Pages in PDF File: 13

Keywords: Decision making, Decision aids, Heuristics and biases, Forecasting, Confidence


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Date posted: July 16, 2014 ; Last revised: June 11, 2015

Suggested Citation

Dietvorst, Berkeley J. and Simmons, Joseph P. and Massey, Cade, Algorithm Aversion: People Erroneously Avoid Algorithms after Seeing Them Err (July 6, 2014). Forthcoming in Journal of Experimental Psychology: General. Available at SSRN: http://ssrn.com/abstract=2466040 or http://dx.doi.org/10.2139/ssrn.2466040

Contact Information

Berkeley J. Dietvorst (Contact Author)
The University of Chicago Booth School of Business ( email )
Chicago, IL 60637
United States

Chicago Booth School of Business Logo

University of Pennsylvania - The Wharton School ( email )
3730 Walnut St.
Suite 500
Philadelphia, PA 19104
United States

Joseph P. Simmons
University of Pennsylvania - The Wharton School ( email )
3733 Spruce Street
Philadelphia, PA 19104-6374
United States

Cade Massey
University of Pennsylvania - The Wharton School ( email )
3641 Locust Walk
Philadelphia, PA 19104-6365
United States

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