An Exploration of Consumer Experiences in the Age of Artificial Intelligence: Perception of Being Observed

This research explores consumers’ experiences in the age of artificial intelligence and identifies a phenomenon, the perception of being observed, which evolved with the rapid transformation of the social environment with the technological revolution. I use the term “being observed” to refer to the instances where consumers think that they are being recorded, watched, or tracked by other parties (i.e., companies, governments). Through three essays, this dissertation aims to provide an understanding of what it means “to be observed” in the digital age, identify antecedents and consequences that are important for consumers’ wellbeing and improving their interactions with companies. Essay 1 provides an understanding of the perception of being observed. Identifying the technology anxiety, self-consciousness and privacy concerns as antecedents, this research develops a scale to measure the extent to which individuals think that they are being observed. Further, it demonstrates that people who think that they are being observed are more sensitive to the data collection practices and protective of their data through limiting their information disclosure. Essay 2 explores an important outcome of being observed by companies and shows that it decreases consumers’ willingness to engage with the company. While being observed, consumers become reluctant to use their resources such as time, money, and data in their interactions. Essay 3 focuses on the consequences of the use of privacy notices. Identifying a novel process, this research shows that privacy notices decrease consumers’ willingness to use websites and applications, and purchase products. Overall, this dissertation contributes to the consumer behavior literature through enhancing our understanding of consumers’ experiences evolving with the advancements in technology and providing important managerial and public policy implications.