Under pressure: how widespread vs severe competitor unethical practices shape responsible artificial intelligence deployment

Purpose This study explores how competitive pressure and organizational goals influence responsible AI (RAI) decisions when introducing AI-based digital services. We examine how two types of unethical competition, horizontal (numerous competitors using similar unethical AI tactics) and vertical (a competitor using highly unethical AI), interact with regulatory-focus-driven objectives to shape RAI deployment. Design/methodology/approach We design three experimental studies featuring scenarios involving the launch of an unethical AI service to assess how competitive pressures and organizational goals affect RAI decisions. Each experiment manipulates horizontal and vertical unethical competition. Participants’ regulatory focus is measured in Study 1 (N = 249) and is manipulated through organizational goals in Study 2 (N = 304) to assess their interactions with competitive pressure. Study 3 (N = 159) tests moral disengagement theory as the underlying mechanisms. Findings The results show that horizontal unethical competition increases the launch of unethical AI, regardless of regulatory focus. We uncover a novel interaction effect between vertical unethical competition and firm objectives. While the severity of a competitor’s unethical behavior reduces RAI deployment directly, prevention-focused goals can counteract this effect under vertical unethical competition, promoting more responsible decisions. Originality/value This research advances RAI scholarship by introducing two unethical competitive contexts to analyze how competitive pressure and organizational goals shape decisions to launch unethical AI services. By isolating horizontal and vertical competition, we provide new insights into how external competition drives UPB. The findings provide a behavioral framework for understanding ethical trade-offs in AI deployment, linking high-level ethics to practical governance in competitive settings.