Can AI eliminate information advantages

Interesting article in the Economist on how AI can help customers being ripped off:

The extent to which AI truly eliminates rip-off markets depends on two things. First, consumers need to know how to use AI properly. Mindlessly repeating advice from ChatGPT is less effective than using the bot as a learning tool that allows a consumer to negotiate more credibly. In this regard, the results of a trial by Jan Biermann, then of the University of Hamburg, John Horton of the Massachusetts Institute of Technology and Johannes Walter of the ZEW-Leibniz Centre for European Economic Research, are encouraging. It involved people estimating how many dots were on an image, with different sorts of AI assistance on offer. The researchers found that people could “assess algorithmic evidence thoughtfully, adjusting their adherence depending on the quality of algorithmic recommendations”.

Second, providers and retailers are likely to fight back with their own AI tools. Amazon listings are already swamped with AI-generated product descriptions. Use ChatGPT with your plumber today, and you may be able to convince him to cut his price. Use ChatGPT with him in a year, and he may have his own model telling him to charge you even more. Companies are working on “generative engine optimisation”, which could result in chatbots putting out information favourable to their product or service. In time, many markets may require AI arbitrators, where both parties agree to abide by the ruling of an impartial third-party bot. What seems clear is that the days of the know-nothing consumer are well and truly over.