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How Artificial Intelligence and Big Data Age Drives Consumer Choice


Recent advances in artificial intelligence and data analytics are facilitating the automation of some consumer businesses (eg in smart homes and self-driving cars) and enabling the use of big data-driven, micro-targeted marketing applications. In addition, it is claimed that these developments can create tension for marketers, consumers and policy makers.
On the one hand, they can contribute to the consumer’s well-being by making consumer choices easier, more practical and more efficient. On the other hand, they can also undermine the consumers’ sense of autonomy, and the absence of this feeling can be detrimental to the consumer’s well-being. Using different perspectives from marketing, economics, philosophy, neuroscience, and psychology, we explore how consumers’ sense of autonomy in making choices affects their well-being.
It is being explored how new technologies can improve or reduce the perceptions of consumers to control their choices and how any of these can reduce the consumer’s well-being. Based on this, it identifies open research questions in the field of choice, welfare and consumer well-being and offers new avenues for future research. How Artificial Intelligence and Big Data Age Drives Consumer ChoiceToday’s consumers are faced with more choices and more information about these options than ever before. According to the standard economic perspective of utility theory, this development should help consumers find and select options that best suit their needs, allowing them to reduce their search costs and increase the benefit they receive from their choices.
Marketers, researchers, and policymakers often assume that lowering search, transaction, and decision-making costs empowers consumers and improves consumer well-being. For example, sophisticated algorithms that scramble large amounts of consumer data allow online marketers to deliver only the right product or service, saving consumers not only from search costs, but also from the unpleasant and difficult trade-offs required by consumer choice.
For example, consider content recommendation systems like Outbrain or Taboola that use big data and AI for behavioral targeting, or content management systems like Netflix or Amazon’s. These types of systems suggest content that a person would enjoy consuming based on their current preferences and allow consumers to effortlessly discover content they are interested in. As another example, autonomous cars (for example, Mobileye and Google) not only take on the tough driving task, but they are also expected to be able to learn to predict different drivers’ preferences for what type of route or what type of route.
Rapid technological developments are also changing how the Internet of Things is. Whether it is thermostats that learn the temperature preferences of users (eg Google’s Nest) or devices that listen to what consumers specify, they are all studies to predict customer preferences. Or, voice recognition systems that fulfill what the customer wants with voice are devices that can learn to anticipate their needs and preferences in the same way. (eg Amazon’s Alexa, Google’s Home or Apple’s Siri).
In this speculative review article, we describe a potential paradox that could characterize choice in the age of automation, artificial intelligence, and data-driven marketing (while this article focuses on marketing contexts, it should be noted that these issues have important implications in many other areas. We argue that they can backfire and generate consumer response if they weaken their emotion. This can happen when consumers lack the ability to control their own choices. Such prediction algorithms are getting better and better at predicting their preferences, and decision-making aids are often too transparent for consumers to understand (preferences). and how they can influence decisions).
Autonomous devices (such as smart cars or home automation solutions) offer the opportunity to completely eliminate costly consumer input from certain decision environments. These devices can reduce or even eliminate the effort a consumer has to invest in making a choice. Results from the large amount of data on other consumers and the environmental context, as well as the consumer in question, can often correspond more closely to consumers’ preferences than they choose. How Artificial Intelligence and Big Data Age Drives Consumer Choice
A self-driving car can get a person to the desired location faster, with less effort, and more safely than if the consumer controls the vehicle. Still, consumers seem to be hesitant about self-driving cars. More generally, the conditions under which consumers may feel more alienated from their ability to make choices and the impact of this technological change on consumer well-being are discussed rather than feeling stronger in their choices.
Using a variety of perspectives from philosophy to neuroscience, it provides a brief overview of current research on consumers’ perceptions of choice and autonomy, discussing and defining their findings regarding some of the unprecedented changes in the choice environments consumers are currently facing. These are for future research that is important to consumers, managers and policy makers. It is covered in four sections.
• First, research investigating the common beliefs of consumers about the autonomy of their actions and choices.
Second, the benefits of consumer autonomy
• The third section describes under what conditions the choice can backfire and outlines the psychological processes that consumers can be harmed by choosing and feeling a sense of autonomy.
• Fourth, the fundamental questions that arise from our discussion of the need to experience autonomy in consumer choice.
All of these provide a broad perspective on whether the rapid automation of marketing and consumption technologies can affect this experience and results. An important question regarding this is what the boundary conditions are and what enhanced or diminished sense of autonomy can have positive or negative effects.
To guide and develop these questions on researchers’ emerging conceptualizations of the effects of automation on consumer well-being, it is necessary to start with a general starting framework derived from discussions about the effects of autonomy. Experts are to alert companies to carefully consider how it can affect an important factor of consumer well-being; this can provide experienced autonomy in consumer choice.

References:
https://doi.org/10.1126/science.aaa1465
https://doi.org/10.1287/mnsc.43.12.1676
https://doi.org/10.1177/0146167208327217

Author: Ozlem Guvenc Agaoglu


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