Finance Seminar Anastassia Fedyk

In today’s Finance Seminar, Anastassia Fedyk (UC Berkeley) presented “AI and Perception Biases in Investments: An Experimental Study” (with Ali Kakhbod, Peiyao Li, and Ulrike Malmendier).

The paper asks whether generative AI can replicate the investment preferences and rationales of diverse, historically underrepresented investors.

Default AI-generated responses overrepresent the preferences of young, high-income individuals.
With demographically seeded prompts, algorithmic bias disappears and AI matches human heterogeneity in investment ratings and rationales.
However: shareholder-like AI defaults risk amplifying the views of dominant groups, underscoring the importance of careful prompt design and demographic representation.