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

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.