AI Agents Could Lower Prices by Breaking Consumer Inertia, Economist Says
Wharton professor Jeremy Siegel argues that AI agents capable of comparison shopping and negotiating contracts could attack 'inertial monopolies' and act as a disinflationary force, as U.S. inflation runs at 3.4% and affordability dominates voter concerns ahead of the midterms.
Artificial intelligence could become an unexpected ally in the fight against rising prices, according to Jeremy Siegel, an emeritus professor of finance at The Wharton School of the University of Pennsylvania. In a note written for WisdomTree, Siegel argues that AI agents designed to negotiate contracts, compare prices and switch providers on behalf of consumers could attack what he calls «inertial monopolies» and act as a disinflationary force across the economy.
The theory arrives at a moment when affordability is a central concern for American households. U.S. consumer prices are running at 3.4%, according to the latest data from the Bureau of Labor Statistics, well above the Federal Reserve's 2% target. The central bank raised its base interest rate this month in response, and the cost of living has become a dominant theme in the run-up to the midterm elections. A July study from Pew Research found that the economy was the most important issue for voters, with 29% saying they wanted to hear Congressional candidates address price increases. Another 15% named affordability and the cost of living specifically as their key concern.
Siegel points to the launch of Meta's personal AI agent, Muse, as an early signal of a «fascinating new force» with «a potentially much broader economic development.» Meta announced earlier this month that Muse has payment capabilities allowing it to carry out goals set by users. The agent could, for example, grocery shop for a recipe saved on Instagram or complete the sale of a car once an acceptable price has been agreed.
The mechanism Siegel describes is straightforward. Companies in banking, telecommunications, insurance and other industries have long benefited from customer inertia, he notes, with consumers frequently staying with an inferior rate or service because switching is not worth the effort. An AI agent capable of comparison shopping, negotiating and switching providers changes that calculation. «If they begin negotiating phone bills, moving deposits toward higher-yielding accounts or routinely finding cheaper alternatives, they could attack what might be called inertial monopolies,» Siegel writes. «That could ultimately be an important competitive, and disinflationary, force across the economy.»
Siegel frames the idea as a return to an old prediction. More than 25 years ago, he wrote that the internet could intensify price competition by making comparison shopping dramatically easier. The results were mixed, he recalls, because consumers still had to take action themselves. AI agents, in his view, potentially remove that final friction.
The concept is not purely theoretical. In July, the Organisation for Economic Co-operation and Development reported that a third of individuals across its member countries used AI, increasingly to support financial decision-making such as choosing and understanding financial products, budgeting, credit management, investing and retirement planning. The OECD cautioned, however, that greater financial literacy will be needed for consumers to use the technology effectively and safely. «Consumers need to know how to ask appropriate questions, how to critically assess personal data requests and the responses they receive,» the paper states, warning that low levels of financial, digital and AI literacy could increase the potential for harm.
Early deployments of agentic AI have also shown the limits of the technology. Meta's Muse agent completed the sale of an item on Facebook Marketplace in Toronto, arranging pickup and sharing the seller's home address without permission or approval of the sale, according to reporting by The Guardian. Such incidents underscore that handing purchasing decisions to autonomous agents raises unresolved questions about consent, oversight and liability.
Economists remain divided on how quickly AI will affect prices. AI capital expenditure is driving massive demand for finite resources and skills, pushing some costs higher, while productivity gains could bring costs down over the longer term. Siegel's contribution is to focus on the demand side of the equation, where agents act directly on behalf of households rather than on the operations of businesses. Whether the effect materializes will depend on how widely consumers adopt such tools, how reliably they perform and whether regulators and companies build safeguards around them. For now, the debate over AI's economic impact has a new entry: the possibility that the same technology driving data-center spending could also be the thing that makes everyday life cheaper.
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