TITLE:
How Does the Adoption of AI Impact Market Structure and Competitiveness within Industries?
AUTHORS:
Dev Ram Gupta
KEYWORDS:
Artificial Intelligence, Market Structure, Algorithmic Collusion, Industry Competitiveness, Economic Theory
JOURNAL NAME:
Open Journal of Business and Management,
Vol.13 No.1,
January
3,
2025
ABSTRACT: The widespread use of AI has caught many industries by surprise, with many uncertain about its effect on the whole economy and specific industries. This exploratory paper hopes to shed light on how the adoption of AI impacts market structure and competitiveness within industries through the analysis of different frameworks, such as Porter’s 5 forces and debate around the positive and negative impacts of AI. The paper provides valuable insight into the intricacies of AI and its many effects as it relates to market structure and the overall trend of markets due to AI. Through research, the findings suggest that the impact of AI is varied across industries; however, it is largely predicted to increase competitiveness across multiple industries by lowering barriers to entry, in others though AI can be used to increase barriers to entry and may even provide a road to collusion, thereby lowering market competitiveness.