Artificial Intelligence-Generated Content and Consumer Decision-Making: The Roles of Trust, Perceived Risk, and AI Literacy

Abstract

Objective: This paper aims to study the effects of generative artificial intelligence (AI), specifically AI-generated images and videos, on consumer trust within digital media and the role of perceived content authenticity as a potential mediator.

Design/methodology/approach: 400 digital media consumers answered a self-administered digital questionnaire and the proposed model was assessed using Partial Least Squares Structural Equation Modelling (PLS-SEM).

Findings: According to the results of the structural model, dynamic AI videos have a strong positive and direct influence on consumer trust, while the influence of static AI images is non-significant. Furthermore, the direct influence of content authenticity on consumer trust was also non-significant, thus the indirect mediation effect was also non-significant. Even though both AI media formats are strong enhancers of content realism, consumers are likely to separate that visual authenticity from their trust of the platform.

Practical implications: The study is limited because of the reliance on a cross-sectional report and the lack of segmentation on the online consumer population. Future studies on this topic may implement longitudinal or experimental studies in order to determine actual behavioural shifts, and may include more contextual factors, such as consumer AI understanding or the product in question. To reduce perceived risk, digital marketers and managers of e-commerce platforms must shift resources away from complex static AI imagery and instead support dynamic AI video generation. In addition to the aforementioned factors, organizations must build consumer trust through secure transaction support, real user testimonials, and other operational factors, as modern consumers are pragmatic.

Originality/value: By applying Media Richness Theory to synthetic media in conjunction with mainstream marketing, this research identifies the 'artificiality paradox'. This research shows that contemporary digital consumers are able to decouple the authentication of content from the platform's Functionality.

Keywords: Artificial Intelligence, AI-Generated Content, Digital Media, Content Authenticity, Online Consumer Behavior SEM-PLS & Pakistan.