Measuring Preferences for Algorithms

Radosveta Ivanova-Stenzel and Michel Tolksdorf
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Radosveta Ivanova-Stenzel: TU Berlin
Michel Tolksdorf: TU Berlin

No 508, Rationality and Competition Discussion Paper Series from CRC TRR 190 Rationality and Competition

Abstract: We suggest a simple method to elicit individual preferences for algorithms. By altering the monetary incentives for ceding control to the algorithm, the menu-based approach allows for measuring, in particular, the degree of algorithm aversion. Using an experiment, we elicit preferences for algorithms in an environment with measurable performance accuracy under two conditions|the absence and the presence of information about the algorithm's performance. Providing such information raises subjects' willingness to rely on algorithms when ceding control to the algorithm is more costly than trusting their own assessment. However, algorithms are still underutilized.

Keywords: algorithm aversion; delegation; experiment; preferences (search for similar items in EconPapers)
JEL-codes: C91 D83 D91 (search for similar items in EconPapers)
Date: 2024-07-30
New Economics Papers: this item is included in nep-ain, nep-cbe, nep-dcm and nep-exp
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Persistent link: https://EconPapers.repec.org/RePEc:rco:dpaper:508

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