Algorithm Reliance, Fast and Slow

Abstract

In algorithm-augmented service contexts where workers have decision authority, they face two decisions about the algorithm: whether to follow its advice, and how quickly to do so. The pressure to work quickly increases with the speed of arriving customers. In this paper, we ask: how do workers use algorithms to manage system loads? With a laboratory experiment, we find that superior algorithm quality and high system loads increase participants' willingness to use their algorithm's advice. Consequently, participants with the superior algorithm make higher-quality recommendations than those with no algorithm (participants with the inferior algorithm make slightly lower-quality recommendations than those without). However, participants do not necessarily speed up by using algorithms' advice; their throughput times only decrease compared to the no-algorithm baseline when the system load is high and algorithm quality is superior, although participants would benefit from working faster in all treatments. This happens in part because participants in the high-load, superior-algorithm treatment serve customers more quickly than participants in the other treatments, conditional on using the algorithm. Participants in the high-load, superior-algorithm treatment work especially quickly in later periods as they increasingly default to their algorithm's advice. Our findings show that algorithms can have benefits for both decision quality and speed. Quality benefits come from workers' decision to use their algorithms' advice, while speed benefits depend on workers' algorithm use and the time they spend deliberating about their algorithm use. Ultimately, algorithm quality and system load are mutually reinforcing factors that influence both service quality and especially speed.

Keywords: behavioral operations, human-algorithm interaction, service operations, queueing systems