Algorithm Aversion: People Erroneously Avoid Algorithms after Seeing Them Err

Forthcoming in Journal of Experimental Psychology: General

13 Pages Posted: 16 Jul 2014 Last revised: 11 Jun 2015

Berkeley J. Dietvorst

The University of Chicago Booth School of Business

Joseph P. Simmons

University of Pennsylvania - The Wharton School

Cade Massey

University of Pennsylvania - The Wharton School

Date Written: July 6, 2014

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.

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

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: https://ssrn.com/abstract=2466040 or http://dx.doi.org/10.2139/ssrn.2466040

Berkeley J. Dietvorst (Contact Author)

The University of Chicago Booth School of Business ( email )

Chicago, IL 60637
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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