ARTIFICIAL INTELLIGENCE AND CONSUMER DECISION-MAKING: A COMPUTATIONAL MANAGEMENT APPROACH IN E-COMMERCE

Abstract

Artificial Intelligence (AI) has transformed the landscape of e-commerce, particularly through product recommendation systems that strongly influence consumers’ purchasing decisions. This study aims to examine how AI-driven recommendation systems affect the buying behavior of online shoppers in Pakistan. The specific objectives are to (1) assess the impact of AI-based recommendations, (2) explore the mediating role of perceived usefulness, and (3) analyze the moderating effect of trust in AI systems. A quantitative approach was employed, utilizing a structured questionnaire completed by 300 respondents. Data were analyzed using Structural Equation Modeling (SEM) with SmartPLS 4.0. The findings reveal that AI recommendations positively influence consumer behavior, with perceived usefulness acting as a partial mediator in this relationship. Furthermore, trust in AI systems fully mediates the connection between AI recommendations and consumer behavior. The study highlights the importance of transparency and value in AI recommendations to strengthen consumer trust and enhance e-commerce strategies.