A Model of Behavioral Manipulation

Daron Acemoglu, Ali Makhdoumi, Azarakhsh Malekian and Asuman Ozdaglar

No 31872, NBER Working Papers from National Bureau of Economic Research, Inc

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.

JEL-codes: D83 D90 D91 L86 (search for similar items in EconPapers)
Date: 2023-11
New Economics Papers: this item is included in nep-ain, nep-com, nep-evo, nep-mic, nep-pay and nep-reg
Note: IO PR
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