Market Algorithmization and Economic Behavior: Consumer Preferences and Digital Market Efficiency
Keywords:
Market algorithmization; Consumer preferences; Digital market efficiency; Algorithmic pricing; Platform economy; IndonesiaAbstract
This study investigates the phenomenon of market algorithmization and its implications for economic behavior, focusing on consumer preferences and digital market efficiency in Indonesia. As digital platforms increasingly mediate market interactions, algorithms play a central role in collecting, processing, and translating consumer data into recommendations, pricing decisions, and transaction flows. Using an interpretive empirical approach, this research examines how algorithmic systems shape consumer choice architectures and influence purchase decisions across Indonesia’s rapidly expanding digital economy. The findings reveal that algorithm-driven personalization and dynamic pricing enhance market efficiency by reducing search costs, accelerating transactions, and improving preference–product matching. However, these efficiency gains coexist with structural challenges, including reduced transparency, algorithmic price discrimination, and uneven consumer influence shaped by digital literacy disparities. The study contributes to the literature on digital markets by demonstrating that algorithmic efficiency is not value-neutral but embedded within institutional and behavioral dynamics. The findings offer policy-relevant insights for regulating algorithmic governance while supporting inclusive and sustainable digital market development.
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