This website uses cookies.

By clicking the "Accept" button or continuing to browse our site, you agree to first-party and session-only cookies being stored on your device to enhance site navigation and analyze site performance and traffic. For more information on our use of cookies, please see our Privacy Policy.

  1. Home
  2. Journals
  3. American Economic Review: Insights
  4. Forthcoming Articles
  5. When Big Data Enables Behavioral Manipulation

American Economic Review: Insights

ISSN 2640-205X (Print) | ISSN 2640-2068 (Online)

When Big Data Enables Behavioral Manipulation

  • Daron Acemoglu
  • Ali Makhdoumi
  • Azarakhsh Malekian
  • Asuman Ozdaglar
American Economic Review: Insights (Forthcoming)

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, behavioral manipulation reduces user welfare. Finally, as the number of products increases, the platform can intensify behavioral manipulation by presenting more low-quality, glossy products.

Downloads