As part of our Research Seminar series, we had the pleasure of welcoming Dr. Anne Klesse from the Rotterdam School of Management (RSM), Erasmus University Rotterdam. As part of her work on the impact of technology on consumer decision making, she presented two projects on the topic of “The psychology of AI”.

Previous research proposes a general aversion of customers towards advice generated by Artificial Intelligence (AI). In her first project, Anne and her co-works aim to identify a customer segment that appreciates (rather than rejects) such AI generated advice. In fact, evidence from several experiments in taste-based domains (such as travel routs and coffee recommendations) indicates that customers who perceive themselves to have expertise or knowledge in a domain (compared to those who do not) draw the most value from advice generated by AI (compared to advice generated by human experts). This insight enables companies to make decisions on when to put humans or AI in the spotlight of their products and services.

In her second project, Anne and her colleagues show that consumer input matters when it comes to generating broad (diverse) vs. narrow (close to what we like) AI recommendations. When faced with the choice to indicated their preferences, consumers tend to display more narrow tastes in front of AI (compared to a human), which in turn leads to a similarly narrow output of recommendations. Because accurate recommendations are valuable this narrow fields of explorations poses several problems, such as customers actually having a broader range of tastes (non-optimal recommendations), showing less engagement with these narrow recommendations and reinforcement of beliefs (formation of echo-chambers).

Taken together, this research sheds more light on how consumers perceive, interact with and make sense of Artificial Intelligence.

We thank Anne for taking the time to share her excellent insights with us.