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Belief Updating and AI Adoption: Experimental Evidence from Firms

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  • Manuel Menkhoff

Abstract

Using a large German firm survey, I randomize information on documented AI productivity gains and industry adoption rates and track firms over time. Beliefs about AI’s productivity potential rise significantly after the treatments across the prior distribution without reducing uncertainty. These treatment-induced belief shifts map into behavior: in firms where the respondent has high decision authority, AI adoption is more likely one year later. Information about competitor adoption has direct effects on actions: incumbent adopters cut prices, while not-yet adopters revise business expectations upward. Together, the results highlight the role of expectations, strategic considerations, and informational frictions in shaping technology diffusion and its macroeconomic impact.

Suggested Citation

  • Manuel Menkhoff, 2025. "Belief Updating and AI Adoption: Experimental Evidence from Firms," CESifo Working Paper Series 12291, CESifo.
    • Handle: RePEc:ces:ceswps:_12291
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    File URL: https://www.ifo.de/DocDL/cesifo1_wp12291.pdf
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    References listed on IDEAS

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    1. repec:osf:osfxxx:hdjpk_v1 is not listed on IDEAS
    2. Edward Felten & Manav Raj & Robert Seamans, 2021. "Occupational, industry, and geographic exposure to artificial intelligence: A novel dataset and its potential uses," Strategic Management Journal, Wiley Blackwell, vol. 42(12), pages 2195-2217, December.
    3. Otis, Nicholas G. & Clarke, Rowan Philip & Delecourt, Solene & Holtz, David & Koning, Rembrand, 2023. "The Uneven Impact of Generative AI on Entrepreneurial Performance," OSF Preprints hdjpk, Center for Open Science.
    4. Abhijit V. Banerjee, 1992. "A Simple Model of Herd Behavior," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(3), pages 797-817.
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    Cited by:

    1. Brüll, Eduard & Mäurer, Samuel & Rostam-Afschar, Davud, 2025. "Beliefs about bots: How employers plan for AI in white-collar work," ZEW Discussion Papers 25-057, ZEW - Leibniz Centre for European Economic Research.

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    Keywords

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    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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