IDEAS home Printed from https://ideas.repec.org/p/arx/papers/2607.21459.html

The Evolution of Digital Search: From Blue Links to Delegated Decision-Making

Author

Listed:
  • David M. Rothschild
  • Nicole Immorlica
  • Brendan Lucier
  • Markus Mobius
  • Aleksandrs Slivkins

Abstract

Digital search is undergoing a fundamental transformation from a human-driven process of discovery to an agent-mediated system of delegated decision-making. In the traditional model of digital search, users translate intent into keyword-based queries, evaluate ranked lists of links, and execute decisions outside the search interface. In an AI-native world, users express goals in natural language, agents interpret these intentions, and outcomes are returned as recommendations or executed decisions. This shift moves search from a link-based user interface to an embedded system component, with implications for transparency, competition, and monetization. The resulting system design problem raises key questions about information quality and access, trust, incentive alignment, and market structure. Early evidence from experimental agent-mediated marketplaces and economic theory suggests that small design choices, such as how stakeholders access information, how options are surfaced, and how actions are executed, have first-order effects on efficiency, competition, and the welfare of consumers and firms. We propose that the future of search will be determined not by incremental improvements in ranking algorithms and natural-language interfaces, but by the design of open, transparent, and competitive agentic systems that govern how decisions are made and how markets operate, highlighting a set of grand challenges at the intersection of AI, economics, and system design.

Suggested Citation

  • David M. Rothschild & Nicole Immorlica & Brendan Lucier & Markus Mobius & Aleksandrs Slivkins, 2026. "The Evolution of Digital Search: From Blue Links to Delegated Decision-Making," Papers 2607.21459, arXiv.org.
  • Handle: RePEc:arx:papers:2607.21459
    as

    Download full text from publisher

    File URL: https://arxiv.org/pdf/2607.21459
    File Function: Latest version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Susan Athey & Glenn Ellison, 2011. "Position Auctions with Consumer Search," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 126(3), pages 1213-1270.
    2. Benjamin Edelman & Michael Ostrovsky & Michael Schwarz, 2007. "Internet Advertising and the Generalized Second-Price Auction: Selling Billions of Dollars Worth of Keywords," American Economic Review, American Economic Association, vol. 97(1), pages 242-259, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dongwoo Kim & Pallavi Pal, 2025. "Nonparametric Estimation of Sponsored Search Auctions and Impact of Ad Quality on Search Revenue," Management Science, INFORMS, vol. 71(12), pages 10047-10066, December.
    2. Alex Jiyoung Kim & Subramanian Balachander, 2023. "Coordinating traditional media advertising and online advertising in brand marketing," Production and Operations Management, Production and Operations Management Society, vol. 32(6), pages 1865-1879, June.
    3. Fei Long & Kinshuk Jerath & Miklos Sarvary, 2022. "Designing an Online Retail Marketplace: Leveraging Information from Sponsored Advertising," Marketing Science, INFORMS, vol. 41(1), pages 115-138, January.
    4. Jonathan Levin, 2011. "The Economics of Internet Markets," Discussion Papers 10-018, Stanford Institute for Economic Policy Research.
    5. Avi Goldfarb, 2014. "What is Different About Online Advertising?," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 44(2), pages 115-129, March.
    6. Alexander Teytelboym & Shengwu Li & Scott Duke Kominers & Mohammad Akbarpour & Piotr Dworczak, 2021. "Discovering Auctions: Contributions of Paul Milgrom and Robert Wilson," Scandinavian Journal of Economics, Wiley Blackwell, vol. 123(3), pages 709-750, July.
    7. Shijie Lu & Yi Zhu & Anthony Dukes, 2015. "Position Auctions with Budget Constraints: Implications for Advertisers and Publishers," Marketing Science, INFORMS, vol. 34(6), pages 897-905, November.
    8. Xiang He & Li Li & Di Wang & Zonghuo Li, 2025. "Advertising bidding involving consumer information sharing," Electronic Commerce Research, Springer, vol. 25(2), pages 1033-1066, April.
    9. Qiaoni Shi & Kai Zhu & Kai Gu, 2026. "Answering Without Referring: How AI Search Rewrites the Web's Economic Bargain," Papers 2607.07652, arXiv.org.
    10. Murali Agastya & Oleksii Birulin, 2023. "Optimal Task Scheduling under Adverse Selection and Hidden Actions," American Economic Journal: Microeconomics, American Economic Association, vol. 15(2), pages 660-698, May.
    11. Erdmann, Anett & Arilla, Ramón & Ponzoa, José M., 2022. "Search engine optimization: The long-term strategy of keyword choice," Journal of Business Research, Elsevier, vol. 144(C), pages 650-662.
    12. Thompson, David R.M. & Leyton-Brown, Kevin, 2017. "Computational analysis of perfect-information position auctions," Games and Economic Behavior, Elsevier, vol. 102(C), pages 583-623.
    13. Shengqi Ye & Goker Aydin & Shanshan Hu, 2015. "Sponsored Search Marketing: Dynamic Pricing and Advertising for an Online Retailer," Management Science, INFORMS, vol. 61(6), pages 1255-1274, June.
    14. Thomas Blake & Chris Nosko & Steven Tadelis, 2015. "Consumer Heterogeneity and Paid Search Effectiveness: A Large‐Scale Field Experiment," Econometrica, Econometric Society, vol. 83, pages 155-174, January.
    15. Yi Zhu & Kenneth C. Wilbur, 2008. "Strategic Bidding in Hybrid CPC/CPM Auctions," Working Papers 08-25, NET Institute, revised Oct 2008.
    16. Przemyslaw Jeziorski & Ilya Segal, 2015. "What Makes Them Click: Empirical Analysis of Consumer Demand for Search Advertising," American Economic Journal: Microeconomics, American Economic Association, vol. 7(3), pages 24-53, August.
    17. Davydov, D. & Izmalkov, S. & Smirnov, A., 2015. "Sponsored-Search Auctions: Empirical and Experimental Works," Journal of the New Economic Association, New Economic Association, vol. 28(4), pages 56-73.
    18. Pierre L’Ecuyer & Patrick Maillé & Nicolás E. Stier-Moses & Bruno Tuffin, 2017. "Revenue-Maximizing Rankings for Online Platforms with Quality-Sensitive Consumers," Operations Research, INFORMS, vol. 65(2), pages 408-423, April.
    19. Mark Armstrong & Jidong Zhou, 2011. "Paying for Prominence," Economic Journal, Royal Economic Society, vol. 121(556), pages 368-395, November.
    20. Nicolás Figueroa & Vasiliki Skreta, 2011. "Optimal allocation mechanisms with single-dimensional private information," Review of Economic Design, Springer;Society for Economic Design, vol. 15(3), pages 213-243, September.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:arx:papers:2607.21459. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: arXiv administrators (email available below). General contact details of provider: https://arxiv.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.