When Will Workers Follow an Algorithm?: A Field Experiment with a Retail Business
53 Pages Posted: 24 Apr 2018
Date Written: April 6, 2018
This paper studies if and under what conditions workers follow an algorithm, in the context of experimentation with product assortments for beverage vending machines. I develop an algorithm to automate the human task, and use simulation to show that it increases revenue. I then conduct a field experiment where I introduce the algorithm. However, it fails to increase revenue, because workers are not willing to follow it. They follow only when their opinions are integrated. Workers having more regret from the last business semester follow the algorithmic advice more, and less when their opinions are integrated.
Keywords: Automation; Experimentation; Learning; Product Assortment Problem; Multi-Armed Bandit Problem; Algorithm Aversion; Conflicts of Interest; Productivity; Retail Business; Beverage Vending Machines
JEL Classification: L20; L81; M12; M15; M20
Suggested Citation: Suggested Citation