Consumer and AI Co-creation : When and Why Human Participation Improves AI Creation

Firms are increasingly leveraging artificial intelligence (AI) to automatically create personalized products (e.g., custom photo products, home designs) for consumers. While AI automation substantially saves consumer effort, it may also reduce consumer engagement potentially leading to a high dropout rate. We conduct three studies to investigate whether and how firms should nudge consumers to participate in product co-creation with AI automation. Using a field experiment involving 128,153 consumers, we find that a simple nudge can significantly increase consumer participation in product co-creation with AI by 12%. The nudged participation further increases immediate purchase by 22% and post-experiment purchase by 2%. Such purchase lifts are greater when consumers create more complex projects, have prior creation experience, or have lower opportunity costs of time. Our second experiment explores how and why firms should encourage consumer-AI co-creation. We learn that nudging attention (e.g., prompting a preview of the creation) rather than participation does not increase purchase and revisit intentions, and that mandating participation is less effective than nudging participation. Mediation tests show that the IKEA effect (‘I made it myself’) plays a bigger role than preference fit in explaining the positive effects of nudging participation. Our third experiment further investigates the interplay between AI creation and nudging participation. We find that nudging participation increase purchase and revisit intentions only when AI creation is present. The consumer-AI co-creation brings the best of both worlds by leveraging AI to save upfront effort and prompting humans to engage in the creative process only if desired