Digital Nudge & Transparency: Experimental Study of Two Types of Recommendation Badges @ AMCIS 2023

This paper investigates the impacts of digital nudging on customer purchase decisions. Digital nudge is an online choice architecture that alters individual’s behavior in a predictable way while preserving all the available options and keeping the same economic incentives. Most recently, academic research started to address the relationship between nudges and Artificial Intelligence/Machine Learning (AI/ML) and found that personalized targeting algorithms influences individuals and collective behaviors in various ways that include undesired consequences for both end-users and firms. Drawing on literature of nudge and anchoring effect, this study proposes two types of nudges based on the transparency level: ambiguous badge (ex., Amazon’s Choice) and specific badge (ex., Best Seller). We further hypothesize that specific badge will manipulate user’s preferences to a less extent than ambiguous badge. This study will contribute to the ethical use of digital nudging in different contexts.

Aug 12, 2023