Demand for Conversational AI: Purpose, Price, and the Social Cost of Wanting a Companion

Elliott Ash, Francesco Capozza and Sergio Galletta

No 12673, CESifo Working Paper Series from CESifo

Abstract: Relational uses of conversational AI register as barely demanded in stated-preference data, even as the market for AI companions grows quickly. We estimate demand across five purposes — administrative assistance, studying, wellness, friendship, and romance — in a preregistered within-respondent conjoint experiment (N = 1,990) that independently randomizes price, privacy, personalization, modality, and safety policy. Purpose dominates every design attribute: respondents require $7.81 per month to accept a romantic companion in place of an administrative assistant, an order of magnitude more than any feature effect. We show this penalty is not a pure preference parameter. Removing the monetary barrier does not close it, because the zero-price premium is attenuated specifically for relational purposes, which no additive model generates. Second-order beliefs are compressed across purposes relative to own interest, and the ratio of the belief–interest gap to the purpose penalty is statistically constant across relational purposes, as a single social-image cost parameter requires. That ratio is also the welfare statistic, and it is invariant to the price slope: social image accounts for up to 39.6% of the romantic penalty and 46.8% of the friendship penalty. A hierarchical Bayes demand model recovers the taste distribution and shows social-image sensitivity shifting relational purposes while leaving price and attribute sensitivities unchanged.

Keywords: conversational AI; conjoint analysis; willingness to pay; social image; second-order beliefs; hierarchical Bayes (search for similar items in EconPapers)
JEL-codes: C81 C93 D82 M31 (search for similar items in EconPapers)
Date: 2026
New Economics Papers: this item is included in nep-ain and nep-exp
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.ifo.de/DocDL/cesifo1_wp12673.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_12673

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().