When AI Meets Art: the Algorithm Appreciation Effect in Creative Content

Generative AI technology has revolutionized the way people create content and reshaped industries and businesses. Despite the market prevalence, research on the impact of generative AI adoption on creators and consumers is still limited. To fill this gap, this study investigates how generative AI adoption affects content creators and how consumers respond to the content created by generative AI. This study uses a difference-in-differences approach to examine content creators' AI adoption in creating content for non-fungible tokens (NFTs). It shows that adopters experience a lift in productivity and sales performance. This study further quantifies the image content characteristics with machine learning techniques and investigates consumer responses to the AI-created content. Findings suggest that consumers show algorithm appreciation from the mere perception of generative AI as the content creator after balancing the objective differences in the content characteristics. Generative AI-created content enjoys higher sales probability and higher sales price and attracts more consumers. This study provides implications for content creators and platforms on generative AI usage and integration.