New Garicano paper: AI shifts work in-house, eroding the advantage of specialization
JMateosGarcia · x · 2026-10-12
JMateosGarcia comments on Luis Garicano's new paper AI, Smith and Coase on how AI affects the boundaries of the firm: AI could reduce specialization by making it cheaper to internalize production, or increase it by lowering transaction costs — and emerging evidence supports the former. He extends the framework to the debate on AI in mathematics, where transaction costs equal verification costs, complicated by knowledge being cumulative.
Related event: LSE's Garicano: AI Erodes Specialization and Reshapes Firm Boundaries(3 posts)→
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