TITLE:
The Economics of Trust: AI, Consumer Confidence, and Market Behavior
AUTHORS:
Cynthia Silvia, Karolina Kopczynski, Gage Patavino
KEYWORDS:
Signaling Theory, Economics, Market Efficiency
JOURNAL NAME:
Modern Economy,
Vol.17 No.8,
August
31,
2026
ABSTRACT: This article describes a conceptual literature review based on signaling theory, reputation economics, and transaction cost economics of trust in AI-enabled markets. As artificial intelligence is growing in application and in operation, trust is a highly critical economic resource that is affecting consumer behavior, technology adoption, and market efficiency. Based on extant empirical evidence and theoretical groundwork, this review provides an overview of the literature on how ethical and transparent AI practices can reduce information asymmetry, strengthen organizational reputation, and enhance competitive advantage. The analysis suggests ways that firms may utilize trust-building mechanisms to foster more stable, equitable, and efficient digital markets.