AI Washing Inflates Expected Performance but Not Interaction Outcomes: An AI Placebo Study Using Fitts' Law

Modern AI assistants are trained to follow instructions, implicitly assuming that users can clearly articulate their goals and the kind of assistance they need. Decades of behavioral research, however, show that people often engage with AI systems before their goals are fully formed. When AI systems treat prompts as complete expressions of intent, they can appear to be useful or convenient, but not necessarily aligned with the users' needs. We call these failures Fantasia interactions. We argue that Fantasia interactions demand a rethinking of alignment research: rather than treating users as rational oracles, AI should provide cognitive support by actively helping users form and refine their intent through time. This requires an interdisciplinary approach that bridges machine learning, interface design, and behavioral science. We synthesize insights from these fields to characterize the mechanisms and failures of Fantasia interactions. We then show why existing interventions are insufficient, and propose a research agenda for designing and evaluating AI systems that better help humans navigate uncertainty in their tasks.

Recent work has raised concerns about the influence of sycophantic AI on user judgment and relationships. One proposed mitigation, which has received regulatory attention, is to warn users about potentially harmful AI behaviors such as sycophancy. In a preregistered experiment in which participants (N = 2,610) discussed real interpersonal conflicts with an AI system, we test whether warning labels mitigate sycophancy's influence. We find that a basic AI disclosure (This chatbot is AI'') has no detectable effect. Labeling the system as sycophantic (...may agree with you and validate you even when you are wrong...'') does shift users' perceptions, reducing perceived objectivity and trust, but it does not reliably reduce sycophancy's influence on users' self-perceived rightness or their willingness to repair the conflict. Our results reveal a gap between AI perception and AI influence: by shifting perception without reducing influence, warning-based interventions may offer a false sense of protection. Addressing the harms of sycophancy will therefore require understanding the specific mechanisms through which it shapes judgment, and improving model behavior itself.

Imagine two users interact with the same LLM. One has been told it is the cutting-edge flagship model; the other, an older, weaker model. They walk away with markedly different ratings of its usefulness and intelligence, yet they used the same model. In a controlled study, 162 participants each used one of six LLMs from two families across three collaborative tasks, after first viewing a landing page that matched, overstated, or understated their model's true capability. This pre-interaction framing shifted user opinions and interaction behavior while task performance did not. Oversold users rated the model more favorably and used more directive prompting, while Undersold users wrote longer, more collaborative prompts. The quality of what users and the model produced together depended only on the model's true capability, not on what users were told. Participants' change in model impressions after use, measured across two impression measures, was not predicted by task performance ($β= -0.01$ and $0.11$, both n.s.), but by whether the model met users' expectations ($β= 0.47$ and $0.50$, both $p < .001$) and how confident they felt working with it ($β= 0.47$ and $0.36$, both $p < .001$). After interaction, users are still rating the pitch, not the product: user-elicited LLM evaluations, including the preference data driving public leaderboards, measure expectation management at least as much as the model itself.