People Perceive More Phantom Costs From Autonomous Agents When They Make Unreasonably Generous Offers

TL;DR

This study explores how perceptions of phantom costs influence people's responses to generous offers from autonomous agents, revealing that agent type and perceived autonomy affect trust and decision-making in negotiations.

Contribution

It demonstrates how perceptions of phantom costs vary with agent type and autonomy, affecting trust and purchase intentions in human-robot interactions.

Findings

Robots are perceived as less self-interested than humans.

Larger discounts increase phantom costs but also boost purchase intentions.

Phantom costs are attributed to the agent, product, and manager.

Abstract

People often reject offers that are too generous due to the perception of hidden drawbacks referred to as "phantom costs." We hypothesized that this perception and the decision-making vary based on the type of agent making the offer (human vs. robot) and the degree to which the agent is perceived to be autonomous or have the capacity for self-interest. To test this conjecture, participants (N = 855) engaged in a car-buying simulation where a human or robot sales agent, described as either autonomous or not, offered either a small (5%) or large (85%) discount. Results revealed that the robot was perceived as less self-interested than the human, which reduced the perception of phantom costs. While larger discounts increased phantom costs, they also increased purchase intentions, suggesting that perceived benefits can outweigh phantom costs. Importantly, phantom costs were not only attributed to the agent participants interacted with, but also to the product and the agent's manager, highlighting at least three sources of suspicion. These findings deepen our understanding of to whom people assign responsibility and how perceptions shape both human-human and human-robot interactions, with implications for ethical AI design and marketing strategies.