Ruled by Robots: Preference for Algorithmic Decision Makers and Perceptions of Their Choices

41 Pages Posted: 22 Mar 2022 Last revised: 23 Mar 2022

See all articles by Marina Chugunova

Marina Chugunova

Max Planck Institute for Innovation and Competition

Wolfgang J. Luhan

University of Portsmouth - Faculty of Business - Department of Economics

Date Written: March 11, 2022

Abstract

As technology-assisted decision-making is becoming more widespread, it is important to understand how the algorithmic nature of the decision-maker affects how decisions are perceived by the affected people. We use a laboratory experiment to study the preference for human or algorithmic decision makers in re-distributive decisions. In particular, we consider whether algorithmic decision maker will be preferred because of its unbiasedness. Contrary to previous findings, the majority of participants (over 60%) prefer the algorithm as a decision maker over a human—but this is not driven by concerns over biased decisions. Yet, despite this preference, the decisions made by humans are regarded more favorably. Participants judge the decisions to be equally fair, but are nonetheless less satisfied with the AI decisions. Subjective ratings of the decisions are mainly driven by own material interests and fairness ideals. For the latter, players display remarkable flexibility: they tolerate any explainable deviation between the actual decision and their ideals, but react very strongly and negatively to redistribution decisions that do not fit any fairness ideals. Our results suggest that even in the realm of moral decisions algorithmic decision-makers might be preferred, but actual performance of the algorithm plays an important role in how the decisions are rated.

Keywords: delegation, algorithm aversion, redistribution, fairness

JEL Classification: C91, D31, D81, D9, O33

Suggested Citation

Chugunova, Marina and Luhan, Wolfgang J., Ruled by Robots: Preference for Algorithmic Decision Makers and Perceptions of Their Choices (March 11, 2022). Max Planck Institute for Innovation & Competition Research Paper No. 22-04, Available at SSRN: https://ssrn.com/abstract=4058066 or http://dx.doi.org/10.2139/ssrn.4058066

Marina Chugunova (Contact Author)

Max Planck Institute for Innovation and Competition ( email )

Munich, 80539
Germany

Wolfgang J. Luhan

University of Portsmouth - Faculty of Business - Department of Economics ( email )

Portsmouth PO4 8JF
United Kingdom

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