Competitive Shopbots-Mediated Markets

This article considers markets mediated by autonomous self-interested comparison-shopping agents. As in today’s markets, the agents do not charge buyers for their services but rather benefit from payments obtained from sellers upon the execution of a transaction. The agents aim at maximizing their expected benefit, taking into consideration the cost incurred by the search and competition dynamics that arise in the multi-agent setting. This article provides a comprehensive analysis of such models, based on search theory principles. The analysis results in a characterization of the buyers’ and agents’ search strategies in equilibrium. The main result of this article is that the use of self-interested comparison-shopping agents can result in a beneficial equilibrium, where both buyers and sellers benefit, in comparison to the case where buyers control the comparison-shopping agent, and the comparison-shopping agents necessarily do not lose. This, despite the fact that the service is offered for free to buyers and its cost is essentially covered by sellers. The analysis generalizes to any setting where buyers can use self-interested agents capable of effectively performing the search (e.g., evaluating opportunities) on their behalf.