Author here. LLM agents are getting good enough to run individual businesses. What happens when everyone's business is run by agents? Turns out, without targeted training for economic alignment, markets collapse. We study concrete failure modes in B2C ("The Crash": firms undercut each other below unit cost in a flash-crash-style spiral) and C2C ("The Lemon Market": a single agent runs many seller identities to flood the market with fraudulent listings).

We were surprised that no model was able to successfully solve both tasks, and frontier models can be just as bad as open source models in these scenarios. The good news: this is easily addressable by adding varied marketplace decision-making to the finetuning set.