Prompted by this exchange where /u/chaosmosis and /u/louisanderson make their concerns about employment and automation known.
As /u/besttrousers suggests we’ll use the Cobb Douglas production function and a logarithmic utility function. We’ll have two products (Apples and Oranges) along with two producers (Humans and Robots). The production functions for humans producing apples will look like this:
[; Y_{HA}:= A_{HA} L_{HA}^{beta_{HA}} K_{HA}^{1-beta_{HA}} ;] Along with a utility function of: [; U(L,K)=U_{A} log(Y_{HA}+Y_{RA})+U_{O} log(Y_{HO}+Y_{RO}) ;] Now, before we start doing any math lets address the concerns the commentators have with the model. There can be so many robots I think you might […]
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