Capability-Priced Micro-Markets: A Micro-Economic Framework for the Agentic Web over HTTP 402
Abstract
This paper introduces Capability-Priced Micro-Markets (CPMM), a micro-economic framework designed to enable robust, scalable, and secure commerce among autonomous AI agents on the agentic web. The framework addresses the fundamental challenge of economic coordination in decentralized agent ecosystems, where entities must transact with minimal human oversight. CPMM synthesizes three key technologies into a unified system: MIT originated, Project NANDA infrastructure for cryptographically verifiable, capability-based security and discovery; the HTTP 402 "Payment Required" status code, with modern X402/H402 extensions for efficient, low-cost micropayments; and the Agent Capability Negotiation and Binding Protocol (ACNBP) for secure, multi-step negotiation and commitment. The paper formalizes agent interactions as a repeated bilateral game with incomplete information, demonstrating theoretically that the CPMM mechanism converges to a constrained Radner equilibrium, ensuring efficient outcomes under information asymmetry. A key theoretical contribution is the concept of "privacy elasticity of demand," which is introduced to quantify the trade-off between an agent's information disclosure and the market price of its services. By integrating secure capabilities, micropayment protocols, and formal negotiation mechanisms, CPMM provides a comprehensive, theoretically-grounded solution for creating functional micro-markets for the emergent agentic web.
Keywords
Cite
@article{arxiv.2603.16899,
title = {Capability-Priced Micro-Markets: A Micro-Economic Framework for the Agentic Web over HTTP 402},
author = {Ken Huang and Jerry Huang and Mahesh Lambe and Hammad Atta and Yasir Mehmood and Muhammad Zeeshan Baig and Muhammad Aziz Ul Haq and Nadeem Shahzad and Shailja Gupta and Rajesh Ranjan and Rekha Singhal},
journal= {arXiv preprint arXiv:2603.16899},
year = {2026}
}