Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/307464 
Year of Publication: 
2024
Series/Report no.: 
ISER Discussion Paper No. 1268
Publisher: 
Osaka University, Institute of Social and Economic Research (ISER), Osaka
Abstract: 
This study examined participants' willingness to pay for stock price forecasts provided by an algorithm, financial experts, and peers. Participants valued algorithmic advice more highly and relied on it as much as expert advice. This preference for algorithms - despite their similar or even lower performance - suggests a shift in perception, particularly among students, toward viewing AI as a reliable and valuable source. However, this "algorithm appreciation" reduced participants' payoffs, as they overpaid for advice that did not suciently enhance performance. These findings underscore the need to develop tools and policies that enable individuals to better assess algorithm performance.
Subjects: 
algorithms
Becker-DeGroot-Marschak mechanism
experts
financial market
forecasting
JEL: 
C90
G1
G4
G17
Document Type: 
Working Paper

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