Towards a better understanding on mitigating algorithm aversion in forecasting: an experimental study

Markus Jung () and Mischa Seiter ()
Additional contact information
Markus Jung: Ulm University
Mischa Seiter: Ulm University

Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, 2021, vol. 32, issue 4, No 3, 495-516

Abstract: Abstract Forecasts serve as the basis for a wide range of managerial decisions. With the potential of new data sources and new techniques for data analysis, human forecasters are increasingly interacting with algorithms. Although algorithms can show better forecasting performance than humans, forecasters do not always accept these algorithms and instead show aversion to them. Algorithm aversion has become a widely known phenomenon. Drawing on the seminal study of Dietvorst et al. (J Exp Psychol Gen 144(1):114–126, 2015), we extend the evidence on algorithm aversion by introducing three environmental variables from the management accounting literature. We argue that time pressure, “do your best” goals, and forecasters’ data input decision rights on the algorithms input mitigate algorithm aversion. To test our hypotheses, we conducted an experimental study with 1,840 participants overall. We found support for our hypothesis that time pressure mitigates algorithm aversion. We found evidence that the mitigation effect is based on forecasters’ loss of confidence in their own forecast when they are under time pressure. We found no support for our hypothesis on “do your best” goals or forecasters’ data input decision rights.

Keywords: Algorithm aversion; Forecasting; Time pressure; Experimental study (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)

Downloads: (external link)
http://link.springer.com/10.1007/s00187-021-00326-3 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:jmgtco:v:32:y:2021:i:4:d:10.1007_s00187-021-00326-3

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/187

DOI: 10.1007/s00187-021-00326-3

Access Statistics for this article

Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung is currently edited by Thomas Günther

More articles in Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().