The Psychology of Personalization in Digital Environments: From Motivation to Well-Being – A Theoretical Integration

The personalization of digital environments is becoming ubiquitous due to the rise of AI-based algorithms and recommender systems. Arguably, this technological development has far-reaching consequences for individuals and societies alike. In this article, we propose a psychological model of the effects of personalization in digital environments, which connects personalization with motivational tendencies, psychological needs, and well-being. Based on the model, we review studies from three areas of application—news feeds and websites, music streaming, and online dating—to explain both the positive and the negative effects of personalization on individuals. We conclude that personalization can lead to desirable outcomes such as reducing choice overload. However, personalized digital environments without transparency and without the option for users to play an active role in the personalization process potentially pose a danger to human well-being. Design recommendations as well as avenues for future research that follow from these conclusions are being discussed.