AI-washing: The Asymmetric Effects of Its Two Types on Consumer Moral Judgments

Greg Nyilasy; Harsha Gangadharbatla

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arXiv · 2507.04352

AI-washing: The Asymmetric Effects of Its Two Types on Consumer Moral Judgments

Greg Nyilasy·Harsha Gangadharbatla

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Abstract

As AI hype continues to grow, organizations face pressure to broadcast or downplay purported AI initiatives - even when contrary to truth. This paper introduces AI-washing as overstating (deceptive boasting) or understating (deceptive denial) a company's real AI usage. A 2x2 experiment (N = 401) examines how these false claims affect consumer attitudes and purchase intentions. Results reveal a pronounced asymmetry: deceptive denial evokes more negative moral judgments than honest negation, while deceptive boasting has no effects. We show that perceived betrayal mediates these outcomes. By clarifying how AI-washing erodes trust, the study highlights clear ethical implications for policymakers, marketers, and researchers striving for transparency.

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Greg Nyilasy, Harsha Gangadharbatla. 2025-07-06. AI-washing: The Asymmetric Effects of Its Two Types on Consumer Moral Judgments. https://arxiv.org/abs/2507.04352

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