Robo-investment aversion

Abstract

In three experiments (N = 2380), we show that people find it more permissible when investment decisions concerning controversial (“sin”) stocks are made by human fund managers rather than by computers (“robos”). In Study 1 (N = 466), participants rated the permissibility of a computer (algorithm) to autonomously exclude morally controversial stocks from investment portfolios as lower than if a human fund manager did the same; this finding was not different if participants were informed that such exclusions might be financially disadvantageous for them. In Study 2 (N = 1231), we show that this robo-fund aversion manifests itself both when considering investment in controversial and non-controversial industries. In Study 3 (N = 683), our findings show that robo-fund aversion is also present when algorithms are given the autonomy to increase investment in controversial stocks. Our findings suggest that algorithm aversion extends to the financial realm, supporting the existence of a barrier for the adoption of innovative financial technologies (FinTech), but one that might be overcome by hybrid (human-in-the-loop) solutions.

Increased morality through social communication or decision situation worsens the acceptance of robo-advisors

“…The decreasing acceptance of the robot recommendation is interpreted as increasing algorithm aversion due to the increasing morality of the decision scenarios. Thus, this study supports research suggesting aversion in moral contexts (Starr et al, 2021;Véliz, 2021;Lucifora et al, 2020;Niszczota and Kaszás, 2020;Hakli and Mäkelä, 2019;Bigman and Gray, 2018;Gogoll and Uhl, 2018).…”

“…Previous studies demonstrated that humans are averse to machines making moral decisions (Bigman and Gray, 2018) or performing moral tasks (Gogoll and Uhl, 2018). Moral decision-making situations are characterized by algorithm aversion (Niszczota and Kaszás, 2020) as well as a negative attitude towards robots (Véliz, 2021;Starr et al, 2021;Lucifora et al, 2020;Hakli and Mäkelä, 2019). This aversion may have been reinforced by the enhanced moral perception of a socially communicating robot in the present study.…”

“…Moreover, the use of vignettes has been critically discussed (Atzmüller and Steiner, 2010;Hughes and Huby, 2002), but represents a typical procedure to investigate algorithm appreciation and algorithm aversion (cf. Pethig and Kroenung, 2023;Wu et al, 2022;Yalcin et al, 2022;Hou and Jung, 2021;Yokoi et al, 2021;Juravle et al, 2020;Niszczota and Kaszás, 2020;Yun et al, 2021;Longoni et al, 2019; M. K. Lee, 2018;Binns et al, 2018). Vignettes offer the advantage of being able to study the acceptance and perception of algorithms before their costly development which in our view justifies their use.…”

“…Participants are more willing to accept forced medication by human caregivers than by care robots (Laakasuo et al, 2023) and claim that robots cannot replace humans in care (Biermann et al, 2021). Moreover, there is an aversion towards moral decision made by machines (Bigman and Gray, 2018;Gogoll and Uhl, 2018) or algorithms (Niszczota and Kaszás, 2020). Some researchers argue, that algorithms or robots are not suitable for moral decision-making because they lack moral understanding, accountability, and emotion (Véliz, 2021;Lucifora et al, 2020;Hakli and Mäkelä, 2019).…”

Improving the Public's Perception of Autonomous Vehicles by Communicating the Consistency of Autonomous Vehicle Algorithms

“…In general, people are averse to algorithms making decisions, showing a preference for human decision-makers even when their decisions are inferior to those produced by algorithms [11][12][13]. For example, Dietvorst and colleagues [11] found that people preferred forecasts produced by humans (as opposed to algorithms), even though humans made more mistakes and their forecasts were less accurate.…”