The Impact of AI and Model-Based Algorithms on Human Behavior
The role of AI algorithms in demand planning and human reactions examined.
1AI and Model-Based Algorithms
A study was conducted on the role of AI and model-based algorithms in demand planning and how they affect human behavior. This research examines how algorithm type and performance influence users' forecast adjustments.
2Laboratory Experiments
Two laboratory experiments showed that algorithm type has no significant direct effect independent of performance. However, users were observed to make more adjustments for AI-based algorithms.
3Field Experiment
In a large field experiment with approximately 575,000 observations, users made significantly greater adjustments for AI-based algorithms. This highlights the impact of AI on human behavior.
4Algorithm Performance
Algorithm performance, whether low or improving, has a significant direct effect on user adjustments. Users adapt their behavior according to the algorithm's performance.
5Response to Low Performance
Both laboratory and field experiments showed stronger responses to low performance from AI-based algorithms. This demonstrates the unique impact of AI on humans.
6Conclusion and Importance
This study reveals the complex effects of AI-based algorithms on human behavior. It demonstrates the value of signaling theory in understanding human-AI collaboration.