The perks and perils of artificial intelligence use in lateral exchange markets

Artificial intelligence (AI) clearly can benefit standard business models, in which firms sell products to buyers. But the outcomes of greater reliance on AI in peer-to-peer marketplaces, also known as lateral exchange markets (LEMs), might differ. Deploying AI likely improves outcomes for buyers and sellers (separately), as well as the effectiveness of their matching. In contrast, contingencies related to the power of the LEM and the presence and interaction of buyers and sellers (consociality) may evoke a dark side of AI. Guided by literature on LEMs, AI, and agency theory, the current work establishes buy- and sell-side tensions that arise when LEMs deploy AI. With a unique focus on buyers and sellers (cf. platforms) in LEMs and careful attention to the dark side, as well as the bright side, of AI, this article offers novel perspectives and implications for research and practice.