The dark side of virtual agents: Ohhh no

Virtual agents (VAs) are increasingly used by firms to establish relationships with customers. While this form of artificial intelligence offers numerous advantages, adverse outcomes can arise when customers’ expectations of VAs are not met. This paper examines how the disconfirmation of both parasocial interactions with the VA and its anthropomorphic characteristics affects users’ dissatisfaction with the VA. Such dissatisfaction might then influence subsequent behavioural outcomes, specifically spreading negative word-of-mouth about the VA (NWOMVA) and avoiding future use of VAs. Data were gathered from VA users in Egypt and the UAE via an online questionnaire. The findings from the two studies confirm that all direct hypotheses were supported and that dissatisfaction with VAs mediates the relationships between both negative parasocial interaction disconfirmation (NPID) and negative VA anthropomorphism disconfirmation and the behavioural outcomes of NWOMVA and VA avoidance. Thus, this paper offers managers guidelines on the effective characteristics of VAs, namely anthropomorphism and parasocial interaction, which allow them to identify the pitfalls of VAs and take preventive or remedial actions. •Artificial intelligence is not always supportive of the customer, and indeed it might be negative for the customer.•Lack of parasocial interaction increases dissatisfaction with the virtual agents.•Lack of anthropomorphic characteristics increases dissatisfaction with the virtual agents.•Dissatisfaction with the virtual agent drives NWOM about them and avoidance of the virtual agent.•Usage of virtual agents without human and parasocial interaction features causes negative customer attitudes and behaviors.