HCAIGNMar 31, 2025

Human aversion? Do AI Agents Judge Identity More Harshly Than Performance

arXiv:2504.13871v1h-index: 13
Originality Highly original
AI Analysis

This research addresses a critical gap in management by revealing a reverse algorithm aversion phenomenon, where AI agents undervalue human input, with implications for designing equitable human-AI collaboration systems in high-stakes business contexts.

This study investigated how AI agents based on large language models (LLMs) evaluate human versus algorithmic input in hybrid decision-making systems, finding that the AI systematically discounts human advice and penalizes human errors more severely than algorithmic errors, especially when identity is disclosed and the human is positioned second.

This study examines the understudied role of algorithmic evaluation of human judgment in hybrid decision-making systems, a critical gap in management research. While extant literature focuses on human reluctance to follow algorithmic advice, we reverse the perspective by investigating how AI agents based on large language models (LLMs) assess and integrate human input. Our work addresses a pressing managerial constraint: firms barred from deploying LLMs directly due to privacy concerns can still leverage them as mediating tools (for instance, anonymized outputs or decision pipelines) to guide high-stakes choices like pricing or discounts without exposing proprietary data. Through a controlled prediction task, we analyze how an LLM-based AI agent weights human versus algorithmic predictions. We find that the AI system systematically discounts human advice, penalizing human errors more severely than algorithmic errors--a bias exacerbated when the agent's identity (human vs AI) is disclosed and the human is positioned second. These results reveal a disconnect between AI-generated trust metrics and the actual influence of human judgment, challenging assumptions about equitable human-AI collaboration. Our findings offer three key contributions. First, we identify a reverse algorithm aversion phenomenon, where AI agents undervalue human input despite comparable error rates. Second, we demonstrate how disclosure and positional bias interact to amplify this effect, with implications for system design. Third, we provide a framework for indirect LLM deployment that balances predictive power with data privacy. For practitioners, this research emphasize the need to audit AI weighting mechanisms, calibrate trust dynamics, and strategically design decision sequences in human-AI systems.

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