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A Model of Behavioral Manipulation

Author

Listed:
  • Daron Acemoglu
  • Ali Makhdoumi
  • Azarakhsh Malekian
  • Asuman Ozdaglar

Abstract

We build a model of online behavioral manipulation driven by AI advances. A platform dynamically offers one of n products to a user who slowly learns product quality. User learning depends on a product’s “glossiness,’ which captures attributes that make products appear more attractive than they are. AI tools enable platforms to learn glossiness and engage in behavioral manipulation. We establish that AI benefits consumers when glossiness is short-lived. In contrast, when glossiness is long-lived, users suffer because of behavioral manipulation. Finally, as the number of products increases, the platform can intensify behavioral manipulation by presenting more low-quality, glossy products.

Suggested Citation

  • Daron Acemoglu & Ali Makhdoumi & Azarakhsh Malekian & Asuman Ozdaglar, 2023. "A Model of Behavioral Manipulation," NBER Working Papers 31872, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:31872
    Note: IO PR
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    More about this item

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

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