Understanding the Relationship Between Firms' AI Technology Innovation and Consumer Complaints

TL;DR

This paper explores how firms' AI technology innovation impacts consumer complaints, revealing that AI product innovation increases complaints by elevating consumers' threat-related emotions, based on multiple empirical studies.

Contribution

It provides new insights into the psychological effects of AI innovation on consumers and compares AI process versus product innovation impacts on complaints.

Findings

AI innovation raises consumers' threat-related emotions

AI product innovation leads to more complaints than process innovation

Empirical evidence from multiple data sources supports these conclusions

Abstract

In the artificial intelligence (AI) age, firms increasingly invest in AI technology innovation to secure competitive advantages. However, the relationship between firms' AI technology innovation and consumer complaints remains insufficiently explored. Drawing on Protection Motivation Theory (PMT), this paper investigates how firms' AI technology innovation influences consumer complaints. Employing a multimethod approach, Study 1 analyzes panel data from S&P 500 firms (N = 2,758 firm-year observations), Study 2 examines user-generated Reddit data (N = 2,033,814 submissions and comments), and Study 3 involves two controlled experiments (N = 410 and N = 500). The results reveal that firms' AI technology innovation significantly increases consumers' threat-related emotions, heightening their complaints. Furthermore, compared to AI process innovation, AI product innovation leads to higher consumer complaints. This paper advances the understanding of consumers' psychological responses to firms' AI innovation and provides practical implications for managing consumer complaints effectively.