When firms replace workers with AI
Competition and household-demand simulation
An illustrative market simulation connects firms’ automation decisions to competition, worker income, and demand in later years.
- Status
- Unpublished working study
- Kind
- Data & geometry
- Stack
- Python · Game theory · Economic modeling · Sensitivity analysis
BUILD NOTES / Unpublished working studyWhen firms replace workers with AI
Project overview · not an interface capture
Competition and household-demand simulation
Python / Game theory / Economic modelingProject overview · not an interface capture
The problem
A cost saving for one firm can look different once rivals respond and changes in household income feed back into demand.
What was built
- A model with three incumbent firms and a potential entrant choosing human staffing, partial automation, full replacement, or exit.
- Quantity competition and a lagged household-spending channel, with scenario and sensitivity comparisons.
- Checks of quantity best responses, unilateral technology changes, financial accounting, and the welfare ledger.
What I learned
The business case depends on rivals, demand, and the time horizon. Keeping those assumptions explicit makes a simulation useful without turning it into a forecast.