In an era where algorithms operate at the core of many products, a new study involving the University of Lucerne has investigated consumer preferences in relation to AI-driven technologies. The study shows how adaptive and pre-programmed algorithms can influence product preferences and purchasing decisions.
Nowadays, algorithms are crucial for a wide range of products such as voice assistants, vacuum robots and smart fridges. A new study, in which the University of Lucerne is involved, is dedicated to the preferences of consumers in this expanding market.
Adaptive and pre-programmed product variants
The global demand for products powered by algorithms and artificial intelligence (AI) is growing continuously. A study recently published in the Journal of Consumer Research examines how people react to products that are controlled by AI. It compares two types of products: those with adaptive algorithms that can adapt and those with pre-programmed algorithms that are not capable of learning. The central question of the study "Unveiling the Mind of the Machine" is: Do consumers have preferences for a certain algorithm and does this influence their purchasing decisions?
The authors Melanie Clegg (WU Vienna and University of Lucerne), Reto Hofstetter (University of Lucerne), Emanuel de Bellis (University of St. Gallen) and Bernd Schmitt (Columbia Business School), come to the conclusion that consumers generally prefer products with highly adaptive algorithms. However, this preference is not universal and depends on the desired results of the product.
Skillfully marketing intelligent products
For example, consumers prefer highly adaptive algorithms for products that can deliver a variety of possible results (e.g. voice assistants). These algorithms are perceived as more creative. In contrast, for products that only offer a limited number of results (e.g. smart door lock), consumers prefer algorithms with low adaptivity as they are seen as more predictable.
The study clearly shows how different types of algorithms influence consumers’ perceptions and preferences for products. It underlines the effects that arise when the "mind" of the machine is revealed to consumers. The study thus provides valuable insights for the marketing of products that are controlled by algorithms.
Clegg, M., Hofstetter, R., de Bellis, E., & Schmitt, B. (2023).
Unveiling the Mind of the Machine.
Journal of Consumer Research, ucad075