An exploration of consumer experiences in the age of artificial intelligence: Perception of being observed

This dissertation explores consumers' experiences in the age of artificial intelligence and identifies a phenomenon, the perception of being observed, which evolved with the rapid transformation of the social environment with the technological revolution. I use the term "being observed" to refer to the instances where consumers think that they are being recorded, watched, or tracked by other parties that can be people or companies. Consisting of three essays, this dissertation aims to provide an understanding of what it means "to be observed" in the digital age, identify antecedents and consequences that are important for consumers' wellbeing and companies' success. Essay 1 provides an understanding of the perception of being observed. Identifying the technology anxiety, self-consciousness and privacy concerns as antecedents, this research develops a scale to measure the extent to which individuals think that they are being observed. Further, it demonstrates that people who think that they are being observed are more sensitive to the data collection practices and protective of their data through limiting their information disclosure. Essay 2 explores an important outcome of being observed by companies for building successful relationships with consumers. The findings of this research show that being observed by companies decrease consumers' willingness to engage with the company, and use their resources such as time, money, and data in their interactions. Being observed by companies implicates that one's data, which is a resource, is being utilized by companies without reciprocity. This, in turn, makes consumers be more protective of their available resources. Making the interaction more reciprocal can mitigate the effect. Essay 3 focuses on the consequences of the use of privacy notices, which are integrated into consumers' lives with the General Data Protection Regulations in 2018. This research shows that privacy notices decrease consumers' willingness to use websites and applications, and purchase products. The underlying mechanism is that privacy notices make it salient to the consumers that they are being observed by companies, which prompts people to calculate the benefits and costs of these observations for both parties. This calculus results in the idea that companies benefit more than consumers, which, in turn, decreases perceived customer orientation of the company, reducing usage intentions. Overall, this dissertation contributes to the consumer behavior literature through enhancing our understanding of consumers' experiences evolving with the advancements in technology and providing important managerial and public policy implications.