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VOL. 8, ISSUE 2 (2026)
The impact of AI Technological Revolution on traditional microeconomics: Opportunities and challenges
Authors
Dr. Lung-Tan Lu
Abstract
The technological revolution centered on
machine learning and generative artificial intelligence is systematically
reshaping the pattern of economic operation from the dimensions of production
factors, decision-making subjects, market mechanisms, and behavioral logics.
This revolution poses a comprehensive challenge to traditional microeconomics,
which is built on the assumptions of rational man, the traditional framework of
production factors, and the single human decision-making subject, and relies on
core tools such as supply-demand analysis, marginal decision-making, and
utility/profit maximization. Focused on the resource allocation behavior of
human economic agents, traditional microeconomics is difficult to adapt to the
new economic system characterized by human-machine hybrid decision-making, data
as a core production factor, algorithm intervention in market operation, and
the iteration of information asymmetry. Based on the classical analytical
framework of microeconomics, this paper systematically dissects the profound
impacts of artificial intelligence technology on core categories including
consumer behavior, information asymmetry, price mechanism, market structure,
firm production function, labor market, wage distribution, externalities,
public goods supply, and institutional governance. It explains the theoretical
dilemmas and transformation directions of microeconomics in the AI era, defines
the disciplinary connotation of algorithm economics as an emerging
interdisciplinary field, and constructs the paradigm expansion path of
microeconomics under the human-machine co-constructed economic system. The
research shows that artificial intelligence does not subvert the core
analytical tools of traditional microeconomics, but promotes its transformation
from the classical paradigm to Microeconomics 2.0, which requires the
endogenization of algorithms, data, human-machine interaction, etc., to realize
the structural supplement and innovation of the theoretical system.
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Pages:14-24
How to cite this article:
Dr. Lung-Tan Lu "The impact of AI Technological Revolution on traditional microeconomics: Opportunities and challenges". International Journal of Management and Economics, Vol 8, Issue 2, 2026, Pages 14-24
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