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Human–Robot Interaction: When Investors Adjust the Usage of Robo-Advisors in Peer-to-Peer Lending

Author

Listed:
  • Ruyi Ge

    (Department of Electronic Commerce, Shanghai Business School, Shanghai 200235, China)

  • Zhiqiang (Eric) Zheng

    (Jindal School of Management, University of Texas at Dallas, Richardson, Texas 75080)

  • Xuan Tian

    (PBC School of Finance, Tsinghua University, Beijing 100083, China)

  • Li Liao

    (PBC School of Finance, Tsinghua University, Beijing 100083, China)

Abstract

We study the human–robot interaction of financial-advising services in peer-to-peer lending (P2P). Many crowdfunding platforms have started using robo-advisors to help lenders augment their intelligence in P2P loan investments. Collaborating with one of the leading P2P companies, we examine how investors use robo-advisors and how the human adjustment of robo-advisor usage affects investment performance. Our analyses show that, somewhat surprisingly, investors who need more help from robo-advisors—that is, those encountered more defaults in their manual investing—are less likely to adopt such services. Investors tend to adjust their usage of the service in reaction to recent robo-advisor performance. However, interestingly, these human-in-the-loop interferences often lead to inferior performance.

Suggested Citation

  • Ruyi Ge & Zhiqiang (Eric) Zheng & Xuan Tian & Li Liao, 2021. "Human–Robot Interaction: When Investors Adjust the Usage of Robo-Advisors in Peer-to-Peer Lending," Information Systems Research, INFORMS, vol. 32(3), pages 774-785, September.
    • Handle: RePEc:inm:orisre:v:32:y:2021:i:3:p:774-785
    DOI: 10.1287/isre.2021.1009
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    3. Said Kaawach & Oskar Kowalewski & Oleksandr Talavera, 2023. "Automatic vs Manual Investing: Role of Past Performance," Discussion Papers 23-04, Department of Economics, University of Birmingham.
    4. Andreas Fügener & Jörn Grahl & Alok Gupta & Wolfgang Ketter, 2022. "Cognitive Challenges in Human–Artificial Intelligence Collaboration: Investigating the Path Toward Productive Delegation," Information Systems Research, INFORMS, vol. 33(2), pages 678-696, June.
    5. Kevin Bauer & Moritz von Zahn & Oliver Hinz, 2023. "Expl(AI)ned: The Impact of Explainable Artificial Intelligence on Users’ Information Processing," Information Systems Research, INFORMS, vol. 34(4), pages 1582-1602, December.
    6. Zhu, Hui & Vigren, Olli & Söderberg, Inga-Lill, 2024. "Implementing artificial intelligence empowered financial advisory services: A literature review and critical research agenda," Journal of Business Research, Elsevier, vol. 174(C).
    7. Mendelson Haim & Zhu Mingxi, 2024. "Optimal Information Acquisition Strategies: The Case of Online Lending," Papers 2410.05539, arXiv.org.
    8. Kevin Bauer & Andrej Gill, 2024. "Mirror, Mirror on the Wall: Algorithmic Assessments, Transparency, and Self-Fulfilling Prophecies," Information Systems Research, INFORMS, vol. 35(1), pages 226-248, March.

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