Abstract
Despite the documented benefits of Artificial Intelligence (AI) to the service industry, the service employees' fear of being replaced by AI continues to be a major concern as we transition to the Feeling Economy. This paper builds upon the Feeling Economy framework and the social comparison theory to examine how different service-related tasks (thinking vs feeling) distinctively impact the service employees' feelings and behavior. Five studies reveal that the presence of AI increases negative outcomes for employees engaging in thinking (vs. feeling) tasks due to its adverse effects on their perceived ability (i.e., relative performance). Findings further indicate that these detrimental effects only happen when service employees compare their abilities with those of AI. This research provides important theoretical and managerial implications, helping to mitigate AI's negative outcomes on employees' fear of replacement and reduced job performance.