MIT Sloan Management Review Article on How Do Customers React When Their Requests Are Evaluated by Algorithms?

  • 4m
  • Gizem Yalcin, Sarah Lim, Stefano Puntoni, Stijn M.J. van Osselaer
  • MIT Sloan Management Review
  • 2022

We are living in the age of algorithms. These formulas govern decisions across all parts of life and have allowed companies to become more customer-oriented and profitable — think Netflix’s subscriber-friendly personalization, or the daily purchases attributed to Amazon’s vast recommendation engine. But what happens when algorithms are used to evaluate customers?

Companies are increasingly adopting algorithms to evaluate information provided by customers and make favorable or unfavorable decisions about them. For example, Raya, the private dating and networking app, uses algorithms to decide which applicants to admit as new members, while Zendrive evaluates customers’ driving skills to determine their car insurance premiums, and the global financial institution ING uses algorithms to make decisions about loan applications.

About the Author

Gizem Yalcin is a Ph.D. candidate at Erasmus University and an incoming assistant professor at the McCombs School of Business at the University of Texas at Austin.

Sarah Lim is an assistant professor of business administration at Gies College of Business at the University of Illinois Urbana-Champaign.

Stefano Puntoni is a professor of marketing at the Rotterdam School of Management at Erasmus University and the director of the Psychology of AI lab at the Erasmus Centre for Data Analytics.

Stijn M.J. van Osselaer is the S.C. Johnson Professor of Marketing at the Johnson Graduate School of Management at Cornell University.

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  • MIT Sloan Management Review Article on How Do Customers React When Their Requests Are Evaluated by Algorithms?