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

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.

In The Proceedings of The 29th Americas Conference on Information Systems, Panama City, Panama, 2023