From Search to Match: How AI Agents Are Reshaping Platform Economics and Organizational Strategy, by Jonathan H. Westover PhD
Description
Abstract: Artificial intelligence agents are fundamentally transforming how platforms operate, shifting economic dynamics from search-based to matching-based systems. This transition introduces new forms of market congestion where AI agents acting on behalf of users create coordination challenges that differ markedly from traditional search costs. Drawing on recent empirical evidence and matching theory, this article examines how AI-powered agents concentrate demand, reshape competitive dynamics, and create novel organizational challenges. Organizations face pressure from algorithm-driven selection processes that prioritize top-ranked options while filtering out alternatives users might have previously discovered through search. The article presents evidence-based organizational responses across multiple industries, from e-commerce to employment platforms, and outlines strategic frameworks for building long-term capability in AI-mediated markets. By understanding these dynamics, organizational leaders can position their enterprises to thrive rather than merely survive in increasingly algorithm-dependent marketplaces.
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United States
