A Simple Solution to Improving Human Supervision of Algorithms: Evidence from Smart Vending
Minda Zhao, Brian Rongqing Han, Xin Chen, Tao Zhu
Cap overrides per decision episode instead of banning or allowing them freely. The constraint acts as a filter: workers spend their limited discretion on corrections that matter. Best for operational AI where human judgment adds value but volume invites noise.
Giving workers full override authority over AI inventory systems invites bias and noise. Blocking overrides wastes local knowledge. How do you structure discretion to filter signal from noise?
Method: A constrained override policy—limiting workers to two downward inventory adjustments per machine—reduced inventory by 1.28% without harming sales. Free overrides cut inventory by 1.95% but also reduced sales by 1.19%. The constraint forced workers to prioritize high-value SKUs, confirmed via local average treatment effects. Gains concentrated among experienced workers and growth-stage SKUs.
Caveats: Tested in retail inventory with clear performance metrics. Transfer to domains with ambiguous success criteria unverified.
Reflections: How does optimal override budget scale with decision complexity or worker expertise? · Would dynamic budgets (more overrides for uncertain predictions) outperform fixed caps? · Do workers game the constraint by clustering overrides on easier decisions?