Artificial intelligence, firms and consumer behavior: A survey

Abstract The current advances in Artificial Intelligence (AI) are likely to have profound economic implications and bring about new trade‐offs, thereby posing new challenges from a policymaking point of view. What is the impact of these technologies on the labor market and firms? Will algorithms reduce consumers' biases or will they rather originate new ones? How competition will be affected by AI‐powered agents? This study is a first attempt to survey the growing literature on the multi‐faceted economic effects of the recent technological advances in AI that involve machine learning applications. We first review research on the implications of AI on firms, focusing on its impact on labor market, productivity, skill composition and innovation. Then we examine how AI contributes to shaping consumer behavior and market competition. We conclude by discussing how public policies can deal with the radical changes that AI is already producing and is going to generate in the future for firms and consumers.