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

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.

Publication Details

Journal
ArXiv.org
Published
2025-03-30
Primary Topic
Ethics and Social Impacts of AI
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article
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article

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

ArXiv.org
Ethics and Social Impacts of AI
article

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

article en

Abstract

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.

ArXiv.org
Peace, Justice and strong institutions
Openalex Percentile: Top 47%
Ethics and Social Impacts of AI
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Human aversion? Do AI Agents Judge Identity More Harshly Than Performance · ArXiv.org (2025) | TGRS Research Map | TGRS