Document Type

Dissertation

Degree

Doctor of Business Administration

Major

Business Administration

Date of Defense

3-20-2024

Graduate Advisor

Vivek K. Singh

Committee

Kailash Joshi

Seemantini Pathak

Abstract

This research explores the biases present in AI algorithms within e-commerce recommendation systems, focusing on how these biases prioritize popular, sponsored, and private-label products over actual customer preferences. We extend the responsible AI discourse by critically examining these biases and their implications for fairness in e-commerce. To strengthen the current understanding of AI fairness in the fields of information systems and computer science, we aim to challenge the assumption that AI fairness is objective and the same for everyone. We examine how individual differences, such as equity sensitivity and exchange ideology, contribute to users' varied perceptions of AI fairness. Through a factorial design survey, we find that customers perceive popularity bias as less unfair than sponsored or private-label biases, indicating a possible preference for conformity or 'herd behavior.' Further, our findings support the influence of exchange ideology, as individuals with higher levels of this trait tend to view recommendation systems as more unfair. However, we did not find similar empirical support for equity sensitivity trait. Finally, we find that perceived fairness negatively influences the distrust towards the recommendation systems. Our findings emphasize that addressing customer fairness perceptions is vital for mitigating distrust and enhancing the effectiveness of these systems. We conclude by discussing the theoretical contributions to the literature on AI and organizational justice and practical recommendations for improving the fairness of AI recommendation systems in e-commerce.

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