# Agentic Markets: Equilibrium Effects of Improving Consumer Search

arXiv: https://arxiv.org/abs/2603.25893 · HTML: https://mlsanity.com/paper/2603.25893/

## Key facts

- Cited by 2 papers in the map (data through 14 Oct 2026).
- First posted on arXiv 26 Mar 2026.

## Built on by (most cited first, 2 of 2)

- [LLM Detection as an Intervention: Downstream Impact under Strategic User Behavior](https://mlsanity.com/paper/2607.19300/) (2026)
- [Who Keeps the Gains from Personal AI Assistants? Seller Adaptation and the Unassisted in a Language-Model Market Simulation](https://mlsanity.com/paper/2610.05823/) (2026)

## Abstract (arXiv)

Motivated by agentic markets -- two-sided markets in which consumers and businesses are assisted by AI tools that facilitate consumers' search -- we study the impact of improved search technology on learning and welfare in markets. We put forth a model where consumers engage in costly search to acquire signals of product fit prior to purchase. The market tracks indications of fit for searched products and indications of quality for chosen products, thereby guiding searches. We characterize the long-run steady-state of the resulting dynamics as well as the impact of improving search technology. We find cheaper search improves learning and consumer surplus, whereas more informative search can degrade both unless the market learns as much as consumers about the products by, for example, ``reading the transcripts'' of agentic conversations. Finally, we consider the impact of search improvements on how businesses set prices. At equilibrium prices in symmetric markets, consumer surplus is improved by cheaper search but may be decreased by more informative search, due to weakened inter-business competition.