How Good is AI at Twisting Arms? Experiments in Debt Collection

 [[{“value”:”How good is AI at persuading humans to perform costly actions? We study calls made to get delinquent consumer borrowers to repay. Regression discontinuity and a randomized experiment reveal that AI is substantially less effective than human callers. Replacing AI with humans six days into delinquency closes much of the gap. But borrowers initially contacted
The post How Good is AI at Twisting Arms? Experiments in Debt Collection appeared first on Marginal REVOLUTION.”}]] 

How good is AI at persuading humans to perform costly actions? We study calls made to get delinquent consumer borrowers to repay. Regression discontinuity and a randomized experiment reveal that AI is substantially less effective than human callers. Replacing AI with humans six days into delinquency closes much of the gap. But borrowers initially contacted by AI have repaid 1% less of the initial late payment one year later and are more likely to miss subsequent payments than borrowers who were always called by humans. AI’s lesser ability to extract promises that feel binding may contribute to the performance gap.

That is from a new paper by James J. Choi, Dong Huang, Zhishu Yang, and Qi Zhang.  No AI asked me to run this blog post!

The post How Good is AI at Twisting Arms? Experiments in Debt Collection appeared first on Marginal REVOLUTION.

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