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Measuring Preferences for Algorithms

Author

Listed:
  • Radosveta Ivanova-Stenzel

    (TU Berlin)

  • Michel Tolksdorf

    (TU Berlin)

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.

Suggested Citation

  • Radosveta Ivanova-Stenzel & Michel Tolksdorf, 2024. "Measuring Preferences for Algorithms," Rationality and Competition Discussion Paper Series 508, CRC TRR 190 Rationality and Competition.
    • Handle: RePEc:rco:dpaper:508
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    More about this item

    Keywords

    algorithm aversion; delegation; experiment; preferences;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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