Quant Robots Draw Blood and the “Human Touch” Bias

Quant Robots Draw Blood and the “Human Touch” Bias

July 29, 2013 Behavioral Finance
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(Last Updated On: July 28, 2013)

It is hard enough to let a computer take control of your investment decisions.

I think there is an innate comfort to human interaction. Let’s call is “Human Touch Bias.”

How might this affect your behavior? My hypothesis is that–in the face of data suggesting otherwise–humans will choose to interact with a human decision maker instead of a computer because they value “human touch.”

If you don’t believe in this bias, watch the following video. I couldn’t help but squirm in my chair watching the video thinking “I will never do this no matter how good the robot is doing!!!.”

[youtube url=”http://youtu.be/s30FPobi9iA”]


Let me know if you feel the same squirm…

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About the Author

Wesley R. Gray, Ph.D.

After serving as a Captain in the United States Marine Corps, Dr. Gray earned a PhD, and worked as a finance professor at Drexel University. Dr. Gray’s interest in bridging the research gap between academia and industry led him to found Alpha Architect, an asset management that delivers affordable active exposures for tax-sensitive investors. Dr. Gray has published four books and a number of academic articles. Wes is a regular contributor to multiple industry outlets, to include the following: Wall Street Journal, Forbes, ETF.com, and the CFA Institute. Dr. Gray earned an MBA and a PhD in finance from the University of Chicago and graduated magna cum laude with a BS from The Wharton School of the University of Pennsylvania.