Machines versus Humans: The Impact of AI Chatbot Disclosure on Customer Purchases

Luo, X, Tong S, Fang Z, Qu Z. (2019), “Machines versus Humans: The Impact of AI Chatbot Disclosure on Customer Purchases,” Marketing Science, Forthcoming.

Fox School of Business Research Paper

30 Pages Posted: 13 Aug 2019

See all articles by Xueming Luo

Xueming Luo

Temple University

Siliang Tong

Temple University

Zheng Fang

Sichuan University - Business School

Zhe Qu

Fudan University

Date Written: July 1, 2019

Abstract

Empowered by artificial intelligence (AI), chatbots are surging as new technologies with both business potentials and customer pushback. This study exploits field experiment data on over 6,200 customers who are randomized to receive highly structured outbound sales calls from chatbots or human workers. Results suggest that undisclosed chatbots are as effective as proficient workers and four times more effective than inexperienced workers in engendering customer purchases. However, a disclosure of chatbot identity before the machine-customer conversation reduces purchase rates by over 79.7%. Additional analyses find that these results are robust to non-response bias and hang-ups, and the chatbot disclosure substantially decreases call length. Exploration of the mechanisms reveals that when customers know the conversational partner is not a human, they are curt and purchase less because they perceive the disclosed bot as less knowledgeable and less empathetic. The negative disclosure effect seems to be driven by a subjective human perception against machines, despite the objective competence of AI chatbots. Fortunately, such negative impact can be mitigated by a late disclosure timing strategy and customer prior AI experience. These findings offer useful implications for chatbot applications, customer targeting, and advertising in conversational commerce.

Keywords: artificial intelligence, chatbot, conversational commerce, new technology, disclosure

Suggested Citation

Luo, Xueming and Tong, Siliang and Fang, Zheng and Qu, Zhe, Machines versus Humans: The Impact of AI Chatbot Disclosure on Customer Purchases (July 1, 2019). Luo, X, Tong S, Fang Z, Qu Z. (2019), “Machines versus Humans: The Impact of AI Chatbot Disclosure on Customer Purchases,” Marketing Science, Forthcoming. , Fox School of Business Research Paper, Available at SSRN: https://ssrn.com/abstract=3435635

Xueming Luo (Contact Author)

Temple University ( email )

1810 N. 13th Street
Floor 2
Philadelphia, PA 19128
United States

HOME PAGE: http://www.fox.temple.edu/mcm_people/xueming-luo/

Siliang Tong

Temple University ( email )

Philadelphia, PA 19122
United States

Zheng Fang

Sichuan University - Business School ( email )

China

Zhe Qu

Fudan University ( email )

No. 670, Guoshun Road
No.670 Guoshun Road
Shanghai, 200433
China

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