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  • 2022
  • Working Paper

Improving Human-Algorithm Collaboration: Causes and Mitigation of Over- and Under-Adherence

By: Maya Balakrishnan, Kris Ferreira and Jordan Tong
  • Format:Print
  • | Language:English
  • | Pages:74
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Abstract

Even if algorithms make better predictions than humans on average, humans may sometimes have “private” information which an algorithm does not have access to that can improve performance. How can we help humans effectively use and adjust recommendations made by algorithms in such situations? When deciding whether and how to override an algorithm’s recommendations, we hypothesize that people are biased towards following a naïve advice weighting (NAW) heuristic: they take a weighted average between their own prediction and the algorithm’s, with a constant weight across prediction instances, regardless of whether they have valuable private information. This leads to humans over-adhering to the algorithm’s predictions when their private information is valuable and under-adhering when it is not. In a lab experiment where participants are tasked with making demand predictions for 20 products while having access to an algorithm’s recommendations, we confirm this bias towards NAW and find that it leads to a 20-61% increase in prediction error. In a follow-up experiment, we find that feature transparency—even when the underlying algorithm is a black box—helps users more effectively discriminate when and how to deviate from algorithms, resulting in a 25% reduction in prediction error.

Keywords

Cognitive Biases; Algorithm Transparency; Forecasting and Prediction; Behavior; AI and Machine Learning; Analytics and Data Science; Cognition and Thinking

Citation

Balakrishnan, Maya, Kris Ferreira, and Jordan Tong. "Improving Human-Algorithm Collaboration: Causes and Mitigation of Over- and Under-Adherence." Working Paper, December 2022.
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About The Author

Kris Johnson Ferreira

Technology and Operations Management
→More Publications

More from the Authors

    • October 2023
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    Speedy Activists: Firm Response Time to Sociopolitical Events Influences Consumer Behavior

    By: Jimin Nam, Maya Balakrishnan, Julian De Freitas and Alison Wood Brooks
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    Demand Learning and Pricing for Varying Assortments

    By: Kris Ferreira and Emily Mower
    • 2023
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    Differentiating on Diversity: How Disclosing Workforce Diversity Improves Brand Attitudes

    By: Maya Balakrishnan, Jimin Nam and Ryan W. Buell
More from the Authors
  • Speedy Activists: Firm Response Time to Sociopolitical Events Influences Consumer Behavior By: Jimin Nam, Maya Balakrishnan, Julian De Freitas and Alison Wood Brooks
  • Demand Learning and Pricing for Varying Assortments By: Kris Ferreira and Emily Mower
  • Differentiating on Diversity: How Disclosing Workforce Diversity Improves Brand Attitudes By: Maya Balakrishnan, Jimin Nam and Ryan W. Buell
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