Risks of Observable and Unobservable Biases in Artificial Intelligence Predicting Consumer Choice

Florian Teleaba (), Sorin Popescu, Marieta Olaru and Diana Pitic
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Florian Teleaba: Technical University of Cluj-Napoca, Cluj-Napoca, Romania
Sorin Popescu: Technical University of Cluj-Napoca, Cluj-Napoca, Romania
Marieta Olaru: University of Economic Studies, Bucharest, Romania
Diana Pitic: Babes-Bolyai University, Cluj-Napoca, Romania

The AMFITEATRU ECONOMIC journal, 2021, vol. 23, issue 56, 102

Abstract: Companies are increasingly adopting Artificial Intelligence (AI) today. Recently however debates started over the risk of human cognitive biases being replicated (and scaled) by AI. Research on biases in AI predicting consumer choice is incipient and focuses on observable biases. We provide a short synthesis of cognitive biases and their potential risk of being replicated in AI-based choice prediction. We also discuss for the first time the risk of unobservable biases, which affect choice indirectly, through other biases. We exemplify this by looking at looking at three prevalent, most frequently investigated biases in consumer behaviour: extremeness aversion, regret aversion and cognitive regulatory focus (prevention- versus promotion-focus). Based on a sample of 1747 respondents, through partial least squares structural equation modelling and significance testing, we show that regret aversion (unobservable bias) significantly reduces extremeness aversion (observable bias) and mediates the influence of cognitive regulatory focus (unobservable bias).

Keywords: cognitive bias; artificial intelligence; choice prediction; consumer choice behaviour; regret aversion; extremeness aversion; regulatory focus. (search for similar items in EconPapers)
JEL-codes: D01 D80 D91 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:aes:amfeco:v:23:y:2021:i:56:p:102

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