The brave new world of digital personal assistants: benefits and challenges from an economic perspective

Abstract

The paper applies economic theories to give an overview of the emerging phenomenon of digital personal assistants (DPAs). A DPA is an intelligent automated system that interacts with the user through a dialogue in natural language, and meanwhile applying third-party services to obtain information and perform various actions. We analyze the benefits of increasing usage of DPAs, such as reduction of transaction costs, enhanced organization efficiency, procompetitive effects, and boosting the e-commerce economy. Besides benefits, however, adopting DPA in life may also contain some risks and downsides, which may reduce the positive welfare effects or even lead to decreasing welfare: biased services, market power on the DPA market and economic dependence on a dominant DPA, potential leveraging of DPA suppliers' market power into neighboring markets, personalized data (ab)use and privacy, media bias and manipulation of public opinion.

Voice Assistants as Gatekeepers for Consumption? - How Information Intermediaries Shape Competition

“…Among them are strength of direct network effects (DNE) and indirect network effects (INE), size of market, economies of size, characteristics of consumer preferences, switching costs and multi-homing activities, and innovation dynamics. Results for DPA market, according to analysis in an earlier paper (Budzinski et al 2019), are presented in table 1.…”

“…Source: based on Budzinski et al (2019) According to these elements of the DPA-market, the range of economic forces driving this market towards a (quasi-) monopolistic structure (i. where GAFA companies consider themselves to be competitors, such as advertising market, in the framework of antitrust cases is divided into the advertising market on social networks, contextual advertising market, etc., so the presence of competition between them is not confirmed. This makes DPA-case highly interesting for new insights and for discussion about proper regulation of the digital sector.…”

“…Horizontal abuse of market power is typically connected with increase of prices for consumers on the market and with shift of profit margins from suppliers of goods to powerful downstream firm (European Commission 2004). However, as current DPAs' stylized business model is platform (Budzinski et al 2019), a different price setting mechanism should be considered, i.e. asymmetric pricing structure.…”

In-room Voice-Based AI Digital Assistants Transforming On-Site Hotel Services and Guests’ Experiences

“…Voice recognition technology has been a popular research topic covered by many scholars in the last decade [5,18,21,27,41]. However, such studies are often focused on the implications of the technology in private households rather than hotel spaces.…”

Intelligent Personal Assistant in Business-Context: Key-feature Evaluation for User Acceptance

“…With intelligent personal assistants (IPA) like Amazon Alexa or Google Assistant, a new area of user-interaction has approached, superseding the user-input by keyboard, mouse and touchscreen with control systems by voice commands, starting workflows and guide the user through complex processes and decision making via speech synthesis (Doss et al, 2018). Influenced by the experience in the private use of IPA functions, users are looking for equivalent comfort in business applications to control processes, resulting in an increasing number of IPA users in the business environment (Budzinski et al, 2018;Saran, 2018). For instance, Amazon initiates Alexa for business issues by integrating Microsoft Office 365 to access and control the scheduler via voice control (Amazon, 2019).…”