The Economics of Builder Saturation in Digital Markets

ArXi:2603.23685v1 Announce Type: cross Recent advances in generative AI systems have dramatically reduced the cost of digital production, fueling narratives that widespread participation in software creation will yield a proliferation of viable companies. This paper challenges that assumption. We Extending the framework to incorporate quality heterogeneity and reinforcement dynamics, we show that equilibrium outcomes exhibit declining average payoffs and increasing concentration, consistent with power-law-like distributions.