Algorithm Aversion
What is Algorithm Aversion?
Algorithm aversion is a psychological tendency where people distrust or reject advice or decisions made by algorithms—even when the algorithms outperform human judgment. After seeing a single mistake by a machine, many users prefer human judgment over algorithmic decisions, discouraging the use of systems that are otherwise accurate and efficient.
The Basic Idea
Imagine that you’re the Director of Marketing at a creative agency. You’re in search of a new graphic designer and have received almost 200 applications. The creative agency has recently adopted a new AI-powered hiring tool that screens resumes for relevant skills, experience, and cultural fit. To save yourself time, you use the tool to review the resumes and identify five top candidates. Just as you’re about to send out interview invites, your coworker asks if you’ll be interviewing their acquaintance, Lily. Lily wasn’t one of the candidates the AI tool suggested, but based on your coworker’s referral, you go back to find her resume.
Lily’s resume looks great! She has supported major brands with graphic design and has strong academic qualifications. She’s someone you think you would have identified as a top candidate, but the AI tool rejected her. Now, after losing trust in the screening tool, you decide to manually review all 200+ resumes. Your loss of trust even leads you to dismiss the five candidates flagged by the tool. When you interview your top five candidates, including Lily, you’re left more confused. The people whose resumes you liked the best performed badly in the interview, unable to answer simple technical questions and lacking passion, except for Lily, who was a superstar. This led you to conclude that the algorithm had made a mistake, so the next time you need to hire someone, you bypass the AI tool altogether.
In this instance, you’ve fallen victim to algorithm aversion. Often, algorithms outperform people and make more optimal decisions than humans. Their decisions are less likely to be influenced by bias, but people generally distrust technology and believe they are better equipped to make decisions. People will forgive human errors more quickly—like the fact that you ignored that your judgment was incorrect for four of the five candidates you interviewed—but may completely lose faith in algorithms if they make just one mistake, in this case, not identifying Lily as a good candidate. Part of the reason for algorithm aversion is that we often don’t understand how algorithms arrive at certain decisions, and the lack of transparency leads to distrust.1
“There is the phenomenon termed ‘algorithm aversion’—humans are more willing to accept flawed decision making from a human than from a formula.”
— Eben Harrel, Senior Editor at the Harvard Business Review and former foreign correspondent in the London bureau of TIME.2
About the Author
Emilie Rose Jones
Emilie currently works in Marketing & Communications for a non-profit organization based in Toronto, Ontario. She completed her Masters of English Literature at UBC in 2021, where she focused on Indigenous and Canadian Literature. Emilie has a passion for writing and behavioural psychology and is always looking for opportunities to make knowledge more accessible.
