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There's a lot of power in using the Wizard of OZ prototyping technique to shape the intents and personality of a conversational UI interaction, especially as it is "natural", voice-driven interaction. Does the "fake" nature of the interaction have to ever be disclosed to the research subject? It seems to be something more easily done hands on and in persona to avoid user frustration after the disclosure.

Of should the user research subject ever be "let in" on what's behind the mirror? Do they need to know?

Wizard of OZ: https://www.interaction-design.org/literature/article/prototyping-learn-eight-common-methods-and-best-practices

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I don't think the user research subject ever needs to be "let in" on what's behind the mirror in Wizard of Oz prototyping. From an ethical standpoint, I think it's pretty harmless. When a research/testing technique starts to potentially harm subjects in some way, you're in muddier waters. But some of the best, most insightful research work ever done has come out of small deceptions, such as the Milgram experiment on obedience to authority figures. Of course, that experiment (although important) faced backlash over the extreme emotional stress placed on its subjects because of the deception. In a Wizard of Oz test, I'm guessing your subjects won't be under any extreme emotional stress. So you're probably fine to keep it private ;)

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