Decisions With Algorithms

This excerpt from a handbook chapter explores the evolving landscape of decision-making in the information age, highlighting the increasing collaboration between humans and algorithms. It outlines a three-stage model of human decision processes when unaided and discusses how bounded rationality leads to the use of heuristics and intuitive judgments when resources are limited. The text further categorizes algorithmic collaboration into informing, recommending, and deciding, providing examples of each in both personal and professional contexts. Crucially, it addresses psychological challenges in the design, adoption, and use of algorithms, including issues of algorithmic bias, transparency, trust, and the potential for unethical applications.