If you tell customers you're using AI, they'll trust you less—even if they admit the AI did a better job.
March 25, 2026
Original Paper
The AI Disclosure Paradox: The Uneven Signaling Effects of Providers' Disclosure of AI Adoption
SSRN · 6348979
The Takeaway
Researchers found an 'AI-adopter aversion' where consumers view service providers who use AI as less professional and trustworthy. Paradoxically, these same consumers admitted that AI-generated pricing was more beneficial to them than human-generated pricing, suggesting that transparency laws might unfairly penalize efficient businesses.
From the abstract
With the growing adoption of AI, industry leaders and policymakers are working to establish best practices and regulations for the disclosure of AI adoption. While recent research has examined how consumers perceive AI-generated products, we focus on the role of AI adoption disclosure as a signal when choosing service providers. Particularly, to isolate the signal embedded in the adoption itself, we study AI pricing adoption, which does not directly affect service quality. In a series of studies