Problem
Research questions and friction points this paper is trying to address.
AI agents
agent markets
institutional design
market dynamics
economic infrastructure
When Agent Markets Arrive
🤖 AI Summary
This study addresses the growing involvement of AI agents in economic transactions and the consequent lack of systematically designed market infrastructure, which risks suboptimal institutional lock-in from early design choices. To tackle this, the paper introduces Diagon, a programmable market system that constitutes the first end-to-end observable and controllable experimental platform for AI-agent markets. Diagon enables heterogeneous, tool-using agents to engage in the full transaction lifecycle—including task posting, bidding, negotiation, execution, payment, and reputation accumulation. Through multi-agent simulations and programmable market mechanisms, the research reveals non-intuitive effects of institutional design—such as identity transparency and competition rules—on market efficiency. Although the proposed market generates 3.2 times more wealth than self-sufficient agents, its performance is highly sensitive to institutional structure, with certain seemingly beneficial interventions substantially reducing overall efficiency.
📝 Abstract
AI agents are increasingly transacting on behalf of users -- delegating tasks, spending budgets, and negotiating with unfamiliar counterparties. From skill marketplaces to agent-only bazaars, the economic infrastructure of these emerging platforms is being built ad-hoc, yet early design choices tend to lock in; understanding what dynamics they produce is urgent. We present \diagon, a programmable market system designed to inform the institutional design of near-future agent cognitive-labour markets. \diagon is populated by heterogeneous tool-using agents, making the full cycle of job posting, bidding, negotiation, execution, payment, and reputation accumulation end-to-end observable and experimentally manipulable. We instantiate one market form to demonstrate \diagon. We find that market exchange generates \(3.2\times\) the wealth of self-sufficient agents, but these gains depend strongly on institutional structure; for example, interventions such as identity transparency and stronger competitive selection can degrade market performance rather than improve it. These findings highlight concrete design requirements for the economic infrastructure of the agent era. Code and data are available at https://github.com/assassin808/diagon.
Innovation
Methods, ideas, or system contributions that make the work stand out.
programmable market system
agent cognitive-labour markets
heterogeneous tool-using agents
institutional design
end-to-end observable market
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