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The Fallback as Signal: Preserved Human Skill, Liability, and Competence Signaling in Credence-Good Markets under Improving AI
Firms deploying imperfect AI must decide how much to keep humans engaged: engagement costs output but builds the fallback skill needed when it fails. A liability pledge whose expected cost falls in that skill restores single crossing on a type that is neither drawn nor embodied once in a good, but b
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