“Why Investors Should Be Wary of Automated Advice” by Nizan Geslevich Packin Printed in The Wall Street JournalJune 21, 2019
Many of us routinely—and even blindly—rely on the advice of algorithms in all aspects of our lives, from choosing the fastest route to the airport to deciding how to invest our retirement savings
But should we trust them as much as we do? Research suggests maybe we shouldn’t, especially when it comes to high-stakes financial decisions.
I recently conducted an empirical study focused on automation bias, or our preference for using algorithmic decisions over those of human experts, and its impact in the area of consumer finance. I provided 800 U.S. survey takers with a series of hypothetical investment situations. Some were told the advice being provided came from a human adviser, while others were told the recommendations came from an automated online algorithm.
Read the full Wall Street Journal article here.