Conversations with a Chatbot: Are you ready to open up your pocket?

Abstract

We examine how AI (Artificial Intelligence) chatbot influences consumers’ spending in an e-commerce shopping environment. We propose that consumers spend more in a chatbot-enabled channel than in a non-chatbot channel, as the perceived level of responsibility for the purchase is lowered when a chabot creates the presence of another agent during the purchasing process. Using the difference-in-differences framework in a field experiment context, we test our proposition by comparing consumers’ spending on a channel with a chatbot to that without a chatbot, while holding fixed the systematic changes over time and across different product categories. We find that consumers spend more when they are coupled with a chatbot than when they are not. Robustness checks for other spending measures and estimation methods corroborate the main findings. We further explore the mechanism behind this effect (i.e., lowered felt responsibility for the purchase) by employing several moderators that can change the level of felt responsibility. Our results support the suggested mechanism that the increased amount of spending in the chatbot channel (vs. non-chatbot channel) is driven by the lowered level of perceived responsibility for the purchase due to the presence of another agent (chatbot) during the purchase. We also rule out possible alternative explanations and show that the positive effect of chatbot on consumers’ spending is not driven by a heightened need for impulsive purchases nor conspicuous consumption.