We examine the effect of humanizing (naming) robo‐advisors on investor judgments, which has taken on increased importance as robo‐advisors have become increasingly common and there is currently little SEC regulation governing key aspects of their use. In our first experiment, we predict and find that investors are more likely to rely on the investment recommendation of an unnamed robo‐advisor, whereas they are more likely to rely on the investment recommendation of a named human advisor. Theory suggests one reason that naming a robo‐advisor may have drawbacks pertains to the complexity of the task the robo‐advisor performs. We explore the importance of task complexity in our second experiment. We predict and find that investors are less likely to rely on a named robo‐advisor when the advisor is perceived to be performing a relatively complex task, consistent with our first experiment, and more likely to rely on a named robo‐advisor when the advisor is perceived to be performing a relatively simple task, consistent with prior research on human‐computer interactions. Our findings contribute to the literature examining how technology influences the acquisition and use of financial information and the general literature on human‐computer interactions. Our study also addresses a call by the SEC to learn more about robo‐advisors. Lastly, our study has practical implications for wealth management firms by demonstrating the potentially negative effects of making robo‐advisors more humanlike in an attempt to engage and attract users.

In this paper, we investigate whether the current references to probability in standard setters' conceptual definitions of assets and liabilities cause individuals to believe that the probability of a future transfer of economic benefits must be above some meaningful threshold for an asset or a liability to exist—a belief that is contrary to standard setters' intent. Results of multiple experiments indicate that the majority of individuals do use a high probability threshold to determine asset existence, whereas for liabilities the majority use a very low threshold. Thus, even under ceteris paribus conditions, liabilities are more frequently judged to exist than assets—a phenomenon analogous to accounting conservatism, as has been discussed in terms of the performance statement. These findings are robust to variation in formal training and in type of liability, and cannot be explained by alternative approaches to judging existence. Consistent with standard setters' intentions, results also suggest that their proposed changes to the definitions of assets and liabilities—changes that attempt to clarify the intended role of probability—do cause a greater proportion of participants to indicate that the relevant financial statement element (asset or liability) exists, relative to participants with no definition. Our study provides important insights for standard setters as they continue work on their missions to update their Conceptual Frameworks and for researchers regarding the role of conservatism on the balance sheet.