Large language models (LLMs) increasingly support heterogeneous tasks within a single interface, requiring users to form, update, and act upon beliefs about one system across domains with different reliability profiles. Understanding how such beliefs transfer across tasks and shape delegation is therefore critical for the design of multipurpose AI systems. We report a preregistered experiment (N = 240, 7,200 trials) in which participants interacted with a controlled AI simulation across grammar checking, travel planning, and visual question answering, each with fixed, domain-typical accuracy levels. Delegation was operationalized as a binary reliance decision—accepting the AI’s output versus acting independently and belief dynamics were evaluated against Bayesian benchmarks. We find three main results. First, participants do not reset beliefs between tasks: priors in a new task depend on posteriors from the previous task, with a 10-point increase predicting a 3–4 point higher subsequent prior. Second, within tasks, belief updating follows the Bayesian direction but is substantially conservative, proceeding at roughly half the normative Bayesian rate. Third, delegation is driven primarily by subjective beliefs about AI accuracy rather than self-confidence, though confidence independently reduces reliance when beliefs are held constant. Together, these findings show that users form global, path-dependent expectations about multipurpose AI systems, update them conservatively, and rely on AI primarily based on subjective beliefs rather than objective performance. We discuss implications for expectation calibration, reliance design, and the risks of belief spillovers in deployed LLM-based interfaces.

Privacy concerns significantly impact AI adoption, yet little is known about how information environments shape user responses to data leak threats. We conducted a 2 × 3 between-subjects experiment (N = 610) examining how risk versus ambiguity about privacy leaks affects the adoption of AI personalization. Participants chose between standard and AI-personalized product baskets, with personalization requiring data sharing that could leak to pricing algorithms. Under risk (30% leak probability), we found no difference in AI adoption between privacy-threatening and neutral conditions (ca. 50% adoption). Under ambiguity (10-50% range), privacy threats significantly reduced adoption compared to neutral conditions. This effect holds for sensitive demographic data as well as anonymized preference data. Users systematically over-bid for privacy disclosure labels, suggesting strong demand for transparency institutions. Notably, privacy leak threats did not affect subsequent bargaining behavior with algorithms. Our findings indicate that ambiguity over data leaks, rather than only privacy preferences per se, drives avoidance behavior among users towards personalized AI.

AI consumer markets are characterized by severe buyer-supplier market asymmetries. Complex AI systems can appear highly accurate while making costly errors or embedding hidden defects. While there have been regulatory efforts surrounding different forms of disclosure, large information gaps remain. This paper provides the first experimental evidence on the important role of information asymmetries and disclosure designs in shaping user adoption of AI systems. We systematically vary the density of low-quality AI systems and the depth of disclosure requirements in a simulated AI product market to gauge how people react to the risk of accidentally relying on a low-quality AI system. Then, we compare participants’ choices to a rational Bayesian model, analyzing the degree to which partial information disclosure can improve AI adoption. Our results underscore the deleterious effects of information asymmetries on AI adoption, but also highlight the potential of partial disclosure designs to improve the overall efficiency of human decision-making.

The ability to make appropriate delegation decisions is an important prerequisite of effective human-AI collaboration. Recent work, however, has shown that people struggle to evaluate AI systems in the presence of forecasting errors, falling well short of relying on AI systems appropriately. We use a pre-registered crowdsourcing study (N = 611) to extend this literature by two underexplored crucial features of human AI decision-making: choice independence and error type. Subjects in our study repeatedly complete two prediction tasks and choose which predictions they want to delegate to an AI system. For one task, subjects receive a decision heuristic that allows them to make informed and relatively accurate predictions. The second task is substantially harder to solve, and subjects must come up with their own decision rule. We systematically vary the AI system’s performance such that it either provides the best possible prediction for both tasks or only for one of the two. Our results demonstrate that people systematically violate choice independence by taking the AI’s performance in an unrelated second task into account. Humans who delegate predictions to a superior AI in their own expertise domain significantly reduce appropriate reliance when the model makes systematic errors in a complementary expertise domain. In contrast, humans who delegate predictions to a superior AI in a complementary expertise domain significantly increase appropriate reliance when the model systematically errs in the human expertise domain. Furthermore, we show that humans differentiate between error types and that this effect is conditional on the considered expertise domain. This is the first empirical exploration of choice independence and error types in the context of human-AI collaboration. Our results have broad and important implications for the future design, deployment, and appropriate application of AI systems.

As algorithms are increasingly augmenting and substituting human decision-making, understanding how the introduction of computational agents changes the fundamentals of human behavior becomes vital. This pertains to not only users, but also those parties who face the consequences of an algorithmic decision. In a controlled experiment with 480 participants, we exploit an extended version of two-player ultimatum bargaining where responders choose to bargain with either another human, another human with an AI decision aid or an autonomous AI-system acting on behalf of a passive human proposer. Our results show strong responder preferences against the algorithm, as most responders opt for a human opponent and demand higher compensation to reach a contract with autonomous agents. To map these preferences to economic expectations, we elicit incentivized subject beliefs about their opponent’s behavior. The majority of responders maximize their expected value when this is line with approaching the human proposer. In contrast, responders predicting income maximization for the autonomous AI-system overwhelmingly override economic self-interest to avoid the algorithm.

Recent advances in machine learning have led to the widespread adoption of ML models for decision support systems. However, little is known about how the introduction of such systems affects the behavior of human stakeholders. This pertains both to the people using the system, as well as those who are affected by its decisions. To address this knowledge gap, we present a series of ultimatum bargaining game experiments comprising 1178 participants. We find that users are willing to use a black-box decision support system and thereby make better decisions. This translates into higher levels of cooperation and better market outcomes. However, because users under-weigh algorithmic advice, market outcomes remain far from optimal. Explanations increase the number of unique system inquiries, but users appear less willing to follow the system’s recommendation. People who negotiate with a user who has a decision support system, but cannot use one themselves, react to its introduction by demanding a better deal for themselves, thereby decreasing overall cooperation levels. This effect is largely driven by the percentage of participants who perceive the system’s availability as unfair. Interpretability mitigates perceptions of unfairness. Our findings highlight the potential for decision support systems to further human cooperation, but also the need for regulators to consider heterogeneous stakeholder reactions. In particular, higher levels of transparency might inadvertently hurt cooperation through changes in fairness perceptions.