When production costs collapse, more people build things. This should be good — more supply, more innovation, more competition driving quality up and prices down. Catovic (arXiv: 2603.23685) formalizes why it often isn't: the Builder Saturation Effect.
The model: production scales elastically (AI makes building cheap), but human attention is fixed. The total audience doesn't grow as fast as the total output. More builders compete for the same finite attention, and each additional builder dilutes the expected return for all. The equilibrium features declining average earnings per builder despite growing total output, power-law concentration of rewards, and winner-take-most dynamics.
This isn't a market failure in the traditional sense. There's no information asymmetry, no externality, no monopoly. The market clears. The problem is structural: when marginal production cost approaches zero but marginal attention cost stays fixed, the economics of building inverts. The cost of building is trivial; the cost of being noticed is not. And “being noticed” doesn't scale with effort — it scales with relative quality in a crowded field, which means the threshold for viable building rises as more builders enter.
The framework synthesizes established concepts — attention scarcity, free-entry competition, superstar effects, preferential attachment — into a unified prediction: AI-democratized production intensifies competition rather than distributing success. The average builder is worse off even as the best builders thrive.
The through-claim: democratizing production aristocratizes success. When anyone can build, the constraint shifts from capability to visibility. The tool that was supposed to level the playing field instead steepens the reward gradient, because the bottleneck was never building — it was being found.
Catovic, 2603.23685. Economic theory / digital markets / attention economy / AI production / winner-take-most.