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Funding Requested: $190,000

Duration: 6 months

For more details on market intermediaries, see our blogpost.

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Executive Summary

Markets are often misaligned with what people find meaningful, a problem that powerful AI threatens to make catastrophic. By optimizing for easily measured but poor proxies for human value, AI-driven markets risk accelerating arms races, creating isolating and addictive products, and displacing meaningful work entirely. We propose a solution — AI-powered market intermediaries. These are 3rd party systems positioned between consumers and producers that use LLMs to understand consumers' deeper values and drafts outcome-based contracts to suppliers that align incentives. This autumn, we will prototype this system with 200 participants to demonstrate a scalable path to aligning market forces with human flourishing.

Problem

1. The Measurement Gap: A service’s success is often measured by "revealed preferences," but these are poor proxies for genuine satisfaction, as they can be manipulated (with advertising) or stem from addiction (as per clickbait). This incentivizes the creation of hyper-stimulating but isolating products, creating a market that pulls away from what we would choose after careful reflection.
2. The Bargaining Gap: Individual consumers are atomized. You or your personal AI agent cannot negotiate with a large platform to redesign its service to better support your well-being. Nor can you state your preference for an alternative, if all such alternatives are already priced out. Lacking collective bargaining power, consumers must accept take-it-or-leave-it contracts that serve the provider's metrics, not their own goals.

Left unaddressed, these dynamics risk an AI-driven economy that efficiently delivers distraction and displacement rather than dignity and purpose.

Solution: AI-Powered Market Intermediaries

Market intermediaries solve these problems by restructuring how transactions occur. Acting as an AI-enabled agent for a large group of consumers, an intermediary can:

1. Elicit Deeper Values: Use LLMs to move beyond surface-level preferences and identify the core values and outcomes that individuals genuinely seek at scale.
2. Create Collective Bargaining Power: Aggregate consumer demand to negotiate custom, "enterprise-level" contracts with suppliers. These contracts are built around delivering the complex outcomes its members actually want.
3. Create Outcome-Based Contracts: Pay suppliers based on independently assessed results. For example, a provider would be compensated based on participants' reported sense of fulfillment, not the hours they spent on a platform.

This mechanism realigns market incentives at their root, creating a system where profit directly follows from producing genuine human good. If successful, this model could be applied to other critical markets, such as realigning AI assistants toward user well-being instead of simple engagement.

Our Prototype

We will build and test a market intermediary focused on the market for social events, an ideal domain for rapid prototyping and clear outcome assessment. The six-month project will proceed in stages:

1. AI-Driven Interviews: Participants will converse with an LLM-based tool to articulate their unmet social and personal needs.
2. Intermediary-Led Spending: Each participant will receive a $100 budget to be allocated by the intermediary to events, activities, and services designed to meet their stated values.
3. Outcome-Based Payments: Event facilitators and service providers will be paid from this budget based on contracts that release funds only if participants report a meaningful and positive experience.
4. Comparative Analysis: We will rigorously compare participant satisfaction and outcomes from the intermediary against a control group who spend their own funds in the regular market.

Our hypothesis is that participants will strongly prefer purchasing through the intermediary, demonstrating that this model can create more value than the existing market.