Brief

A new research paper explores how shared AI models used by competing sellers could inadvertently lead to supracompetitive pricing. The study, which uses a duopoly model, suggests that configuring AI for robustness and reproducibility might cause a phase transition to higher prices above a certain output-fidelity threshold. While competitive pricing is stable below this threshold, above it, the AI model can exhibit bistability, leading to either competitive or supracompetitive outcomes depending on the AI's initial propensity. AI