Luo et al. (2019)

Question 1

(AI) chatbots

Answer 1

A popular new technology with unprecedented business potential. They are computer programs that simulate human conversations through voice commands or text chats and serve as virtual assitants to users. The market size is expanding quickly

Question 2

Study’s aim

Answer 2

Varies the disclosure of voice-based chatbots (no disclosure, disclosure before conversation, after conversation, or after decision), as well as human expertise (proficient or inexperienced workers). They test the causal impact of chatbot disclosure on customer purchases and compare the performance of chatbots and human workers

Question 3

Automatisation

Answer 3

Completely removes variable costs and replaces them with fixed costs

Question 4

Underdogs

Answer 4

New human workers with low past performance

Question 5

Proficient workers

Answer 5

Experienced human agents with high past performance

Question 6

Result

Answer 6

Disclosure of chatbot machine identity reduces purchase rates substantially. Undisclosed chatbots are as effective as proficient workers and four times more effective than inexperienced workers in engendering customer purchases. Disclosure before conversation reduces purchase rates by 79%. Customers tend to purchase less and terminate calls early because they perceive the disclosed chatbot as less knowledgeable and empathetic