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A model shows firms rationally over-automate and share only the demand loss

development2026-08-16

Claim

Firms rationally over-automate, a new model shows, since each keeps the savings but shares the demand loss, a trap only a Pigouvian automation tax escapes, while inside the labs the promised four-day week became 70-hour baselines.

Reporting date: 2026-08-16 (not necessarily the event date)

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Welcome to August 16, 2026 (theinnermostloop.substack.com)

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Welcome to August 16, 2026

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An essay argues AI is dissolving work as a source of meaning

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A model shows firms rationally over-automate and share only the demand loss
Innermost Loop KB — secondary record
Reporting date: 2026-08-16
KB permalink: https://nicholsn.github.io/innermost-loop-kb/developments/2026-08-16-firms-rationally-over-automate
Claim: Firms rationally over-automate, a new model shows, since each keeps the savings but shares the demand loss, a trap only a Pigouvian automation tax escapes, while inside the labs the promised four-day week became 70-hour baselines.
Attributed sources:
- Welcome to August 16, 2026 — https://theinnermostloop.substack.com/p/welcome-to-august-16-2026
This citation does not imply independent verification of linked-source claims.

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