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Do People Follow AI Advice? Evidence from a Pension Portfolio Choice Experiment

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Listed:
  • Hongseok Choi
  • Jeongbin Kim
  • Matthew Kovach
  • Kyu-Min Lee
  • Euncheol Shin
  • Hector Tzavellas

Abstract

We study how differences in AI-generated financial recommendations are transmitted into individual portfolio choices. In an experiment with 400 employed adults enrolled in workplace defined contribution pension plans in South Korea, participants allocate a hypothetical pension balance across eleven products and may revise it after receiving one of two fixed AI-generated recommendations. A $2 \times 2$ design randomizes recommendation content and whether the recommendation includes a short rationale. Approximately 37$\%$ of the experimentally induced difference between the aggressive and conservative recommendations passes through to final portfolios. This causal contrast changes expected portfolio return, volatility, allocations across risk grades, and the number of products held, but produces no detectable difference in computed Sharpe ratios. 81$\%$ of participants revise. Among revisers, 95$\%$ move toward the assigned recommendation and implement about half of the suggested adjustment. Rationales do not detectably alter pass-through. These results show that users partially and selectively transmit recommendation content into economically meaningful differences in risk exposure while retaining substantial weight on their initial choices.

Suggested Citation

  • Hongseok Choi & Jeongbin Kim & Matthew Kovach & Kyu-Min Lee & Euncheol Shin & Hector Tzavellas, 2026. "Do People Follow AI Advice? Evidence from a Pension Portfolio Choice Experiment," Papers 2608.11371, arXiv.org.
  • Handle: RePEc:arx:papers:2608.11371
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