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Beneficial Mistrust in Generative AI? The Role of AI Literacy in Handling Bad Advice

Author

Listed:
  • Dirk Leffrang

    (Paderborn University)

  • Nina Passlack

    (University of Bamberg)

  • Oliver Müller

    (Paderborn University)

  • Oliver Posegga

    (University of Bamberg)

Abstract

Despite the increasing proliferation of Generative Artificial Intelligence (GenAI), systems like large language models (LLMs) can sometimes present misleading or false information as true – a problem known as "hallucinations." As GenAI systems become more widespread and accessible to the general public, understanding how AI literacy influences advice-taking from imperfect GenAI advice is crucial. Drawing on the correspondence bias, we study how individuals with varying AI literacy levels react to GenAI providing bad advice. Gathering empirical evidence through an online programming experiment, we find that AI-literate individuals take less advice, especially while receiving bad advice, but not exclusively. We outline how correspondence bias can explain these variations, reconciling mixed findings of prior studies on AI literacy. Our research thus contributes a holistic perspective on the beneficial and detrimental mistrust through AI literacy to education, integration, and evaluation programs of AI, highlighting the dangers of naive evaluation strategies.

Suggested Citation

  • Dirk Leffrang & Nina Passlack & Oliver Müller & Oliver Posegga, 2025. "Beneficial Mistrust in Generative AI? The Role of AI Literacy in Handling Bad Advice," Working Papers Dissertations 136, Paderborn University, Faculty of Business Administration and Economics.
    • Handle: RePEc:pdn:dispap:136
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    File URL: http://groups.uni-paderborn.de/wp-wiwi/RePEc/pdf/dispap/DP136.pdf
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    More about this item

    Keywords

    AI literacy; artificial intelligence; AI education; algorithm aversion;
    All these keywords.

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior

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