EconWorks Podcast

Who should decide when an AI model is safe enough to release?

AI companies have a responsibility to develop safe products. But does that responsibility allow competing developers to collectively restrict innovation?

In this episode of EconWorks, we explore the tension between AI safety and antitrust law.

We start with an unusual example: an agreement among competitors to lower prices. Even when consumers appear to benefit, such an agreement can violate antitrust law.

We then examine two Supreme Court cases that help explain why some forms of cooperation are lawful while others restrict competition.

In Broadcast Music, Inc. v. CBS, the Court recognized that collaboration among competitors can create new products and economic efficiencies.

In *National Society of Professional Engineers v. United States*, the Court rejected an attempt to suppress competition on the grounds that competitive bidding could compromise safety.

Finally, we consider the September 29, 2026, AI safety accord. Its commitments to internal controls, independent audits, and corporate oversight offer a possible approach to improving AI safety while preserving independent innovation decisions.

Can companies take responsibility for safety without collectively determining the pace of technological progress?

Read the full article and graphic analysis: https://blog.econworks.com/p/can-ai-companies-agree-to-slow-innovation?r=562wri

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Why do cartels continue to exist? And could AI make them less profitable without ever discovering an illegal agreement?

In the final episode of How Cartels Really Work, EconWorks examines how artificial intelligence could change the incentives that make cartels profitable.

We begin with a simple hypothetical: An economy contains 1,000 cartels. AI could make collusion easier, increasing their number to 10,000, or strengthen competitive pressures, reducing their number to 100.

Either way, some cartels remain profitable.

We explore why detecting illegal agreements is difficult and revisit the Nasdaq market-maker case, where unusual pricing patterns prompted an extensive antitrust investigation.

But AI’s more significant contribution may come from buyers rather than competition authorities.

Consider a marketing board whose members collectively sell one billion units annually. A price increase of just one cent per unit could generate $10 million in additional revenue.

For an individual consumer, the same increase might cost only $1 annually—not enough to justify spending time searching for a better deal.

AI could change that calculation.

By reducing the costs of comparing offers, finding alternatives, and coordinating purchases, AI could allow smaller businesses and individual consumers to become more sophisticated buyers.

As buyers respond more effectively to higher prices, some cartels may become less profitable or even collapse.

And none of this necessarily requires buyers to identify an illegal agreement.

The central question is not simply whether AI can detect cartels, but whether it can change the economic incentives that make collusion profitable.

This episode concludes our ten-part exploration of cartel economics and introduces the next upcoming EconWorks series, When Your AI Meets Their AI.

Read the full article and graphic analysis: https://blog.econworks.com/p/cartels-episode-10-the-other-side?r=562wri

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Developers of AI have expressed concerns about the dangers of increasingly powerful artificial... But could their safety pact lead to antitrust problems if rival firms collectively cut back on innovation? On this edition of EconWorks, we take a look at the difference between legitimate cooperation and agreements that restrain competition. Let us begin with a simple question. If competitors cannot agree to fix prices, even at lower levels, when can they legitimately collaborate? Two landmark decisions in the Supreme Court provide some important insights: - Broadcast Music v. CBS (1979): Joint efforts by competitors that result in valuable goods and reduced transaction costs. - *National Society of Professional Engineers v. United States* (1978): Why safety issues don’t justify limiting competition as a matter of course. Next up we go to the AI safety pact of September 29, 2026, and its pledges on internal controls, independent evaluations, and corporate oversight. The deal creates an important opening: AI companies might be able to improve safety without collectively slamming on the brakes of innovation. The obvious questions are Who is responsible for the safety of AI? How much safety is enough? Who decides? And when does cooperation between competitors become an antitrust issue? EconWorks examines these questions through the lens of economics, antitrust law, and the incentives that shape AI markets.

Read the full article and graphic analysis: https://blog.econworks.com/p/can-ai-companies-agree-to-slow-innovation?r=562wri

Explore more visual economics content: https://econworks.com

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This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit blog.econworks.com/subscribe

Why are cartels still around when they are illegal? And could an artificial intelligence make them less profitable without even detecting them?In the last episode of How Cartels Really Work, EconWorks explores how AI may alter the economic incentives behind collusion.Suppose an economy with 1,000 cartels. AI could make coordination easier, and the number of cartels could rise to 10,000. Or AI could increase competition and take the number down to 100.But even if there are only 100 cartels left, the basic question remains: Why do firms keep colluding?We discuss the problem of detecting cartels, and we use the Nasdaq market-maker case to show the difference between detecting suspicious pricing patterns and proving an illegal agreement.We then turn to purchasers.Large companies such as Costco can shop around for suppliers and negotiate the best prices. Smaller businesses and individual consumers often don’t have the same tools.AI may change that.Let's say a marketing board represents producers that sell a billion units a year between them. Raising the price by one cent per unit could bring in an extra $10 million in revenue.So for a customer who buys 100 units a year, the same increase will cost just $1.In the past, the consumer had little motivation to spend time and effort searching for a better deal.But what if an AI agent could do the searching, comparing, and negotiating?As buyers become more sophisticated, it may become harder and harder for some cartels to keep prices high.The buyers wouldn't have to know about the cartel. They would just have to find better buying opportunities.In this episode, we explore how AI could alter the incentives for cartel members, buyers, and competition authorities—and why some cartels might still be profitable even if everyone is using AI.

Read the full article and graphic analysis: https://blog.econworks.com/p/cartels-episode-10-the-other-side?r=562wri

Explore more visual economics content: https://econworks.com

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This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit blog.econworks.com/subscribe

Do you choose your supermarket first, or open a delivery app and then decide where to shop?

That everyday decision provides a starting point for understanding DoorDash’s proposed acquisition of Instacart. In this EconWorks conversation, we follow two hypothetical neighbors whose grocery orders look identical but whose alternatives may differ.

Could retailer delivery keep prices competitive? Would combining memberships benefit households? Could different discounts leave some shoppers more exposed to the loss of rivalry? And what evidence would show whether the merger’s promised savings outweigh its pricing incentives?

We explore both the potential concerns and the efficiency case, explaining why a large market share does not answer every competitive question. EconWorks will follow developments and revisit the analysis as more evidence becomes public.

Read the full article and graphic analysis: https://blog.econworks.com/p/doordashinstacart-whose-choices-would?r=562wri

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Three companies bid on a government contract. One wins, the rest lose.But what if the companies agreed on the winner before they made their bids?In Episode 9 of How Cartels Really Work, EconWorks explores the economics of bid rigging using a real U.S. school bus cartel case.In United States v. Southwest Bus Sales (1994), the school bus distributors coordinated their bids and divided contracts amongst themselves. But the case also raises an interesting economic question: Were the school districts capable of designing better auctions?Bus manufacturers sold to the distributors and could offer them wholesale price breaks to help them compete. This meant that competition between manufacturers could influence the bids made by distributors.What if school districts held separate auctions for the manufacturing of buses and the distribution services?And what if they had AI?An AI buying assistant might help buyers evaluate alternative auction designs, identify additional suppliers, and monitor procurement outcomes over time.Buyers may not need to show that their suppliers are colluding before they improve their procurement processes.If suppliers realize that buyers are using AI to monitor and reverse-engineer their auctions, they may reconsider whether collusion is worthwhile.But there is another option: suppliers can also use AI.Could competing artificial intelligence systems learn to coordinate their bidding? And what happens when buyers and suppliers are constantly adapting their strategies to each other?In this episode we explore:How repeated procurement auctions enable bid rigging.The U.S. school bus cartel and the role of the manufacturers and distributors.The effect of auction design on competition is also important.How separate auctions for manufacturers and distributors could change procurement outcomes.How AI could help buyers design and monitor auctions at lower cost than traditional economic consulting.Why knowledge of buyers’ use of AI could deter suppliers from colluding.How supplier AI could create new competition challenges.The key question: Can buyers make cartels less profitable by designing better auctions rather than just trying to detect collusion?

Read the full article and graphic analysis:

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Two neighbors order the same groceries from the same supermarket. One chooses the store first. The other opens a delivery app first. Could DoorDash’s proposed acquisition of Instacart affect them differently?

This EconWorks episode explores how people choose grocery delivery, when a supermarket’s own service provides an alternative, and why switching between DoorDash and Instacart matters after common ownership.

We also examine market shares, personalized offers, and the potential savings from combining delivery operations. The question is whether consumers would face better or worse terms than if the companies continued competing.

Anna and Ben are illustrative shoppers, not measured consumer segments. The episode analyzes a proposed transaction and does not assume higher prices or a particular regulatory outcome.

Read the full article and graphic analysis: https://blog.econworks.com/p/doordashinstacart-whose-choices-would?r=562wri

Explore more visual economics content: https://econworks.com

YouTube: https://www.youtube.com/@EconWorks-d3e

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This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit blog.econworks.com/subscribe

Three companies bid on a government contract. One wins, the others lose.

But what if the companies agreed on the winner before they placed their bids?

In Episode 9 of How Cartels Really Work, EconWorks takes a look at the economics of bid rigging, using a real U.S. school bus cartel case.

In United States v. Southwest Bus Sales (1994), the distributors of school busses had coordinated their bids and divided contracts among themselves. But the case also poses an interesting economic question: Could the school districts have designed better auctions?

Bus manufacturers sold to the distributors and could provide them wholesale price breaks to help them compete. This meant that the bids made by distributors could be influenced by competition between manufacturers.

What if school districts put separate auctions for the manufacturing of buses and the distribution of services?

And what if they had AI?

An AI buying assistant could help buyers assess alternative auction designs, find additional suppliers, and track procurement performance over time. Buyers may not need to prove that their suppliers are colluding if they want to improve their procurement processes. Suppliers may also reconsider collusion if they realize that buyers are using AI to monitor and reverse-engineer their auctions. But there is another option: suppliers can also utilize AI.

Would competing artificial intelligence systems learn to coordinate their bidding? What happens when buyers and suppliers are always adapting their strategies to each other?

In this episode we look at: How repeated procurement auctions enable bid rigging. The Role of the U.S. School Bus Cartel and the Manufacturers and Distributors. The impact of auction design on competition is significant. How separate auctions for manufacturers and distributors might affect procurement results.

How AI could assist buyers in designing and monitoring auctions at lower cost than traditional economic consulting. Why knowing buyers' use of AI could discourage suppliers from colluding. How AI from suppliers could pose new competition challenges. The central question is whether buyers can design better auctions to make cartels less profitable rather than relying on detecting collusion.

Read the full article and graphic analysis: https://blog.econworks.com/p/cartels-episode-9-bid-rigging-can?r=562wri

Explore more visual economics content: https://econworks.com

YouTube: https://www.youtube.com/@EconWorks-d3e

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This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit blog.econworks.com/subscribe

What would really change if Tesla and SpaceX merged?

Rockets, vehicles, connectivity, energy storage, and AI. Those all sound consequential. But the size and the technological reach do not prove the merger would harm competition.

In this episode of EconWorks we examine possible concerns about blocking rivals, bundling products, and killing future competition—and why those theories don’t seem to have much support at the moment. We also discuss the possible benefits of common ownership for better engineering, investment coordination, and cost reduction.

The key question: What difference would ownership make that companies cannot achieve through contracts and cooperation?

This episode is looking at a hypothetical merger; it’s not assuming a deal is done.

Read the full article and graphic analysis: https://blog.econworks.com/p/spacex-and-tesla-what-would-a-merger?r=562wri

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How can a cartel survive for years when its customers are sophisticated firms with substantial buying power? In episode 8 of How Cartels Really Work, we examine two large cases in history, the automobile parts cartels and the international vitamins cartel. Both involved suppliers selling to large businesses with professional purchasing departments. But some of these illegal agreements ran for a decade or more. Why didn’t their customers see the cartels? We begin with Costco’s buying practices. If suppliers want to raise their prices, Costco’s buyers examine the underlying costs and challenge any increases that don’t appear warranted. Sophisticated purchasing managers may have trouble figuring out if their suppliers are colluding. A company might hire economists to analyze the prices, costs, and bidding strategies of suppliers. However, it can be expensive to do detailed economic analysis on thousands of products. Artificial intelligence could alter that equation. AI may allow buyers to look at more transactions, identify suspect pricing patterns, and uncover alternative suppliers at a much lower cost. And here’s an intriguing possibility: Buyers might only have to show that a cartel is less profitable.

AI could increase competitive pressure on suppliers and make some cartels harder to sustain if it helps customers identify better alternatives. AI could alter the economics of collusion by making buyers better at buying, right?

Read the full article and graphic analysis: https://blog.econworks.com/p/cartels-episode-8-the-biggest-cartels?r=562wri

Explore more visual economics content: https://econworks.com

YouTube: https://www.youtube.com/@EconWorks-d3e

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This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit blog.econworks.com/subscribe