Economic Implications of AI Agents in Digital Markets

This chapter is a technical report that evaluates the economic implications of AI agents as market participants in digital environments. It outlines how these autonomous systems can reduce transaction costs, thereby transforming digital markets. The report discusses the demand for AI agents, which arises from users seeking to optimize decision-making while minimizing effort. It details the dual role of AI agents in augmenting human capabilities and substituting for human intermediaries, emphasizing their potential to enhance efficiency in market transactions. Furthermore, the chapter presents the challenges and frictions introduced by AI agents, such as congestion and price obfuscation, while also addressing the regulatory issues that may arise from their adoption. The authors argue that AI agents could lead to significant shifts in market design, enabling new structures that prioritize agent capabilities. The report concludes by highlighting the need for economic research to inform policy and market design in the context of AI-mediated transactions.