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Algorithmic Consumers

45 Pages Posted: 29 Nov 2016 Last revised: 6 Apr 2017

Michal S. Gal

University of Haifa - Faculty of Law

Niva Elkin-Koren

University of Haifa - Faculty of Law

Date Written: August 8, 2016

Abstract

The next generation of e-commerce will be conducted by digital agents, based on algorithms that will not only make purchase recommendations, but will also predict what we want, make purchase decisions, negotiate and execute the transaction for the consumers, and even automatically form coalitions of buyers to enjoy better terms, thereby replacing human decision-making. Algorithmic consumers have the potential to change dramatically the way we conduct business, raising new conceptual and regulatory challenges.

This game-changing technological development has significant implications for regulation, which should be adjusted to a reality of consumers making their purchase decisions via algorithms. Despite this challenge, scholarship addressing commercial algorithms focused primarily on the use of algorithms by suppliers. This article seeks to fill this void. We first explore the technological advances which are shaping algorithmic consumers, and analyze how these advances affect the competitive dynamic in the market. Then we analyze the implications of such technological advances on regulation, identifying three main challenges.

Keywords: artificial intelligence, algorithms, regulation, antitrust

JEL Classification: K00, K21, K23, L1, L13, L14, L4, L40, L41, D40

Suggested Citation

Gal, Michal S. and Elkin-Koren, Niva, Algorithmic Consumers (August 8, 2016). Harvard Journal of Law and Technology, Vol. 30, 2017. Available at SSRN: https://ssrn.com/abstract=2876201

Michal Gal (Contact Author)

University of Haifa - Faculty of Law ( email )

Mount Carmel
Haifa, 31905
Israel

HOME PAGE: http://weblaw.haifa.ac.il/en/faculty/gal/pages/home.aspx

Niva Elkin-Koren

University of Haifa - Faculty of Law ( email )

Mount Carmel
Haifa, 31905
Israel
972-4-8240638 (Phone)
972-4-8240681 (Fax)

HOME PAGE: http://weblaw.haifa.ac.il/en/Faculty/ElkinKoren/Pages/default.aspx

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