Demand for Conversational AI

Elliott Ash, Francesco Capozza and Sergio Galletta

No 12673, CESifo Working Paper Series from CESifo

Abstract: We estimate demand for five conversational AI use cases — administrative assistance, studying, wellness, friendship, and romance — using a preregistered, within-respondent conjoint experiment in a U.S. online sample (N=1,989). Purpose dominates interest: instrumental uses rank highest, romance lowest. Free pricing raises interest sharply but is attenuated for relational purposes, revealing non-monetary signaling costs that price reductions cannot eliminate. Privacy and personalization shift demand; interaction modality does not. Second-order beliefs exceed own interest in proportion to the purpose penalty, consistent with a single stigma parameter suppressing stated below latent demand. Corrected consumer surplus for a free romantic companion turns positive once suppression costs are recovered — the welfare mirror image of social media’s collective trap.

Keywords: AI; conjoint experiment; WTP; second-order beliefs (search for similar items in EconPapers)
JEL-codes: C81 C93 D82 (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_12673

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