Although evidence-based algorithms consistently outperform human forecasters, people often fail to use them after learning that they are imperfect, a phenomenon known as algorithm aversion. In this paper, we present three studies investigating how to reduce algorithm aversion. In incentivized forecasting tasks, participants chose between using their own forecasts or those of an algorithm that was built by experts. Participants were considerably more likely to choose to use an imperfect algorithm when they could modify its forecasts, and they performed better as a result. Notably, the preference for modifiable algorithms held even when participants were severely restricted in the modifications they could make (Studies 1-3). In fact, our results suggest that participants’ preference for modifiable algorithms was indicative of a desire for some control over the forecasting outcome, and not for a desire for greater control over the forecasting outcome, as participants’ preference for modifiable algorithms was relatively insensitive to the magnitude of the modifications they were able to make (Study 2). Additionally, we found that giving participants the freedom to modify an imperfect algorithm made them feel more satisfied with the forecasting process, more likely to believe that the algorithm was superior, and more likely to choose to use an algorithm to make subsequent forecasts (Study 3). This research suggests that one can reduce algorithm aversion by giving people some control - even a slight amount - over an imperfect algorithm’s forecast.
Empirical results often hinge on data analytic decisions that are simultaneously defensible, arbitrary, and motivated. To mitigate this problem we introduce Specification-Curve Analysis. This approach consists of three steps: (i) estimating the full set of theoretically justified, statistically valid, and non-redundant analytic specifications, (ii) displaying the results graphically in a manner that allows identifying which analytic decisions produce different results, and (iii) conducting statistical tests to determine whether the full set of results is inconsistent with the null hypothesis of no effect. We illustrate its use by applying it to three published findings. One proves robust, one weak, one not robust at all. Although it is impossible to eliminate subjectivity in data analysis, Specification-Curve Analysis minimizes the impact of subjectivity on the reporting of results, resulting in a more systematic, thorough, and objective presentation of the data.