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AI Persuasion and Financial-Decision Making: Experimental Evidence on Dominated Investment Choices

Author

Listed:
  • Joshua Greubel
  • Henrik Guhling
  • Fabian Herweg

Abstract

In an online experiment, we study how generative AI steers individuals toward dominated choices and, conversely, helps them avoid such mistakes. Participants choose between two virtual index funds, one of which strictly dominates the other. An AI chatbot increases optimal choices by over 20 percentage points when promoting the optimal fund but reduces them by almost 30 points when promoting the dominated fund. Its influence is undiminished when framed as bank-provided despite a disclosed interest. Incentivized human advice steers choices toward the promoted fund but is significantly less effective. Transcript analyses tentatively suggest that AI's advantage reflects more persuasive argumentation.

Suggested Citation

  • Joshua Greubel & Henrik Guhling & Fabian Herweg, 2026. "AI Persuasion and Financial-Decision Making: Experimental Evidence on Dominated Investment Choices," CESifo Working Paper Series 12925, CESifo.
    • Handle: RePEc:ces:ceswps:_12925
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    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions

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