Learning to Adopt Generative AI

Recent advancements in generative AI, exemplified by ChatGPT, have dramatically transformed how people access information. Despite its powerful capabilities, the benefits it provides may not be equally distributed among individuals - a phenomenon referred to as the digital divide. Building upon prior literature, we propose two forms of digital divide in the generative AI adoption process: (i) the learning divide, capturing individuals' heterogeneous abilities to update their perceived utility of ChatGPT; and (ii) the utility divide, representing differences in individuals' actual utility derived from per use of ChatGPT. To evaluate these two divides, we develop a Bayesian learning model that incorporates demographic heterogeneities in both the utility and signal functions. Leveraging a six-month clickstream dataset, we estimate the model and find significant learning and utility divides across various demographic attributes. Interestingly, lower-educated and non-white individuals derive higher utility gains from ChatGPT but learn about its utility at a slower rate. Furthermore, males, younger individuals, and those with an IT background not only derive higher utility per use from ChatGPT but also learn about its utility more rapidly. Besides, we document a phenomenon termed the belief trap, wherein users underestimate ChatGPT's utility, opt not to use the tool, and consequently lack new experiences to update their perceptions, leading to continued underutilization. Our simulation further demonstrates that the learning divide can significantly affect the probability of falling into the belief trap, another form of the digital divide in adoption outcomes (i.e., outcome divide); however, offering training programs can alleviate the belief trap and mitigate the divide.