Participation governance in consumer and AI co-creation: Whether to intervene and how to design it

Artificial intelligence reshapes digital mass customization by altering the structure of consumer co-creation. When consumers start from a draft generated by artificial intelligence rather than a blank canvas, outcomes are jointly determined by two stages: whether consumers initiate co-creation and, conditional on participation, how much refinement effort they exert. This separation makes participation a governable design margin—an issue that is largely muted in traditional blank-canvas customization, where participation and effort are tightly bundled. Partnering with a leading United States online retailer of personalized photo products, we study whether and how firm interventions at the participation stage shape downstream purchase outcomes. We develop a two-stage model in which, relative to a baseline with organic participation, a nudge lowers start-up frictions and expands voluntary entry, whereas a mandate serves as a strong boundary-case intervention that guarantees entry but can weaken how participation translates into purchase, generating a reach–efficiency trade-off. We examine these predictions in two randomized experiments. In Study 1, a light-touch nudge increases participation by 5.98 percentage points and raises revenue and order frequency. The evidence is consistent with gains arising primarily through expanded entry into consumer co-creation with artificial intelligence. In Study 2, mandates increase participation relative to nudges, but we find no clear evidence of additional gains in purchase or revisit intentions. Instead, mandates increase low-value participation, in which consumers exert minimal effort and report low purchase intention. Together, these findings show that in mass customization enabled by artificial intelligence, participation governance is a consequential design choice: firms must consider not only how many consumers initiate co-creation, but also whether the participation they induce creates downstream value.