AI Agents: Economics of Market Design Transformation

<p>This is an excerpt from a <strong>National Bureau of Economic Research (NBER) Working Paper</strong> authored by multiple researchers, examining the economic implications of the rise of <strong>AI agents</strong> in digital markets. Titled &quot;The Coasean Singularity? Demand, Supply, and Market Design with AI Agents,&quot; the paper investigates how these autonomous systems, which act on behalf of humans, will dramatically reduce transaction costs and reshape the economy. The authors analyze the factors driving <strong>demand for AI agents</strong> (derived from the trade-off between decision quality and effort reduction) and the dynamics governing <strong>supply</strong> (including the shift from human to scalable AI agent production and complex pricing models). Furthermore, the paper considers the <strong>equilibrium effects</strong> of agents on existing market structures, suggesting they could reduce rents but also increase price dispersion through sophisticated obfuscation tactics, while also detailing how agents can enable <strong>previously impractical market designs</strong> that rely on complex preference elicitation. Finally, the text explores regulatory challenges related to <strong>market power, liability, and privacy</strong> that must be addressed for a successful transition to an agent-mediated economy.</p>