Strategic Advice in the Age of Personal AI

TL;DR

This paper analyzes how personal AI assistants influence strategic advice, showing that their adoption impacts trust, counteraction, and advisor performance in complex, non-linear ways.

Contribution

It introduces a novel strategic model of personal AI adoption, examining its effects on advice, trust, and incentives in decision-making environments.

Findings

Advisor performance peaks at intermediate AI adoption levels.

Greater AI influence increases advisor vulnerability.

Trust incentives are reshaped by AI adoption and credibility costs.

Abstract

Personal AI assistants have changed how people use institutional and professional advice. We study this new strategic setting in which individuals may stochastically consult a personal AI whose recommendation is predictable to the focal advisor. Personal AI enters this strategic environment along two dimensions: how often it is consulted and how much weight it receives in the human's decision when consulted. Anticipating this, the advisor responds by counteracting the personal AI recommendation. Counteraction becomes more aggressive as personal AI is consulted more often. Yet advisor performance is non-monotone: equilibrium loss is highest at intermediate levels of adoption and vanishes when personal AI is never used or always used. Trust affects performance through a single relative influence index, and greater relative influence of personal AI increases advisor vulnerability. Extending the framework to costly credibility building, we characterize how personal AI adoption reshapes incentives to invest in trust.