For the past hundred years, consumers have often faced information asymmetry in markets — when sellers know more about a product than buyers. A classic case is the used car market described by economist George Akerlof in 1970. Buyers, unsure of product quality, suspect deception, making the market less transparent and lowering quality.
The Internet partially addressed this issue: services like Carfax or Auto.Ria in Ukraine help verify vehicle histories, ride-hailing apps monitor routes, and review aggregators help avoid low-quality services. Still, it is estimated that 25% of American consumer spending goes to goods and services with serious informational gaps, especially in construction, real estate, and healthcare.
The development of artificial intelligence (AI) is opening new opportunities to resolve these challenges. Chatbots are being used to check contracts, choose better products, and file complaints. Stanford research shows consumers are increasingly turning to large language models for financial issues and complaints, especially those with limited language proficiency.
AI is already used in car price negotiations, where chatbots help save clients time and money. Effective use of AI, however, requires an understanding of both its potential and limitations, and companies are also deploying their own AI-driven automation for marketing goods and services.
It is important to remember that AI does not guarantee completely reliable information. Some systems can provide errors or only show information favorable to the seller. Sometimes chatbots are manipulated, as happened in a California dealership when buyers received incorrect offers due to an algorithm error.
AI helps level the playing field, allowing all market participants to pick the best options and protect their interests. Nonetheless, the best results come from combining AI advice with human expertise.
As technology advances, the role of AI in consumer protection and market transparency will continue to grow. However, this brings new challenges for regulators, companies, and consumers, who must learn to use these tools effectively and consider possible risks.
The future of markets belongs to informed consumers equipped with the tools to protect their rights and make advantageous decisions.
