Artificial intelligence versus human service agents: How their presence shapes consumer information privacy concerns

Service agents act on behalf of retailers to interact with consumers. Agents’ service delivery requires information from consumers, which may raise consumers’ concerns about their information privacy. While previous research has linked service agents’ presence to perceptions of being watched, little is known about how artificial intelligence (AI) (vs. human) agents’ passive or mere presence affects consumer information privacy concerns—a gap this research aims to address. In a series of experimental studies and drawing on reactance theory, we find that consumers express lesser privacy concerns in the presence of AI (vs. human) service agents, which in turn leads to a greater willingness to share personal information and increased intention to engage with the retailer. To explain this effect, we identify consumers’ perceptions of service agents’ power: consumers perceive AI (vs. human) agents as having less power over them and therefore have lesser privacy concerns. The findings are consistent across various retailer types (e.g., florists, home décor, food, pharmacy) and diverse participant groups. In addition, we identify two boundary conditions of this effect: the trustworthiness of service agents and the timing of their presence (before or after a purchase). Understanding these elements can help retailers effectively manage privacy concerns and strategically determine the presence of different types of service agents.