Abstract
The law of demand and supply is the fundamental law of economic trade. It consists of the demand characteristics of the customer which describes the relationship between price and quantity of goods. For example, if the price of a good is low the customer will buy more goods and services than if the price is high. The relationship between price and the willingness of the customers to buy goods and services is called the demand curve. The other aspect of the demand and supply law is the supply curve which relates the relationship between the price and the quantity of goods suppliers are willing to produce. For example, the higher the price the more the goods and services the suppliers are willing to produce. Conversely, the lower the price the lesser the goods and services the suppliers are willing to produce. The point at which the suppliers are willing to supply a specified quantity of goods and services which are the same as those that the customers are willing to buy is called equilibrium. This chapter studies how the law of demand and supply is changed by the advent of artificial intelligence (AI). It is observed that the advent of AI allows the opportunity for individualized demand and supply curves to be produced. Furthermore, the use of an AI machine reduces the degree of arbitrage in the market and therefore brings a certain degree of fairness into the market which is good for the efficiency of the economy.
This is a preview of subscription content, log in via an institution.
Buying options
Tax calculation will be finalised at checkout
Purchases are for personal use only
Learn about institutional subscriptionsReferences
Akerlof GA (1970) The market for lemons: quality uncertainty and the market mechanism. Q J Econ 84(3):488–500 (The MIT Press)
Bentham J (1776) A fragment on government. London. Preface (2nd para.)
Darwin C (1861) On the origin of species by means of natural selection, or the preservation of favoured races in the struggle for life, 3rd edn. John Murray, London
Goldberg D (1989) Genetic algorithms in search, optimization and machine learning. Addison-Wesley Professional, Reading, MA
Hosseini HS (2003) Contributions of medieval Muslim scholars to the history of economics and their impact: a refutation of the schumpeterian great gap. In Biddle
Jeff E, Davis JB, Samuels, Warren JA (2003) Companion to the history of economic thought. Blackwell, Malden, MA, p 28. doi:10.1002/9780470999059.ch3. ISBN:0-631-22573-0
Locke J (1691) Some considerations on the consequences of the lowering of interest and the raising of the value of money, Marxists
Marshall A (1920) Principles of economics. Library of Economics and Liberty
Marwala T (2007) Computational intelligence for modelling complex systems. Research India Publications, Delhi
Marwala T (2009) Computational intelligence for missing data imputation, estimation, and management: knowledge optimization techniques. IGI Global, Pennsylvania
Marwala T (2010) Finite element model updating using computational intelligence techniques: applications to structural dynamics. Springer, Heidelberg
Marwala T (2012) Condition monitoring using computational intelligence methods. Springer, Heidelberg. ISBN 978-1-4471-2380-4
Marwala T (2013) Economic modeling using artificial intelligence methods. Springer, Heidelberg
Marwala T (2014) Artificial intelligence techniques for rational decision making. Springer, Heidelberg
Marwala T (2015) Causality, correlation, and artificial intelligence for rational decision making. World Scientific, Singapore
Montani G (1987) Scarcity. In: Eatwell J, Millgate M, Newman P (eds) The new Palgrave. A dictionary of economics. 4. Palgrave, Houndsmill, pp 253–254
Mankiw NG, Taylor MP (2011) Economics (2nd ed., revised ed.). Cengage Learning, Andover
Marwala T, Hurwitz E (2015) Artificial intelligence and asymmetric information theory. arXiv:1510.02867
Marwala T, Lagazio M (2011) Militarized conflict modeling using computational intelligence. Springer, Heidelberg
Marwala T, Boulkaibet I, Adhikari S (2017) Probabilistic finite element model updating using bayesian statistics: applications to aeronautical and mechanical engineering. John Wiley and Sons, New Jersey
Mill JS, Bentham J (2004). Utilitarianism and other essays. In: Ryan A (ed) Penguin Books, London
Spence M (1973) Job market signaling. Q J Econ 87(3):355–374 (The MIT Press)
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
Copyright information
© 2017 Springer International Publishing AG
About this chapter
Cite this chapter
Marwala, T., Hurwitz, E. (2017). Supply and Demand. In: Artificial Intelligence and Economic Theory: Skynet in the Market. Advanced Information and Knowledge Processing. Springer, Cham. https://doi.org/10.1007/978-3-319-66104-9_2
Download citation
DOI: https://doi.org/10.1007/978-3-319-66104-9_2
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-319-66103-2
Online ISBN: 978-3-319-66104-9
eBook Packages: Computer ScienceComputer Science (R0)