O-Ring Automation
Joshua S Gans, Avi Goldfarb
Key takeaways in an O-ring production process where task quality contributes multiplicatively to output:
- Automating one task changes the quality of workers’ contributions to other tasks
- Automation decisions are discrete – it’s optimal to automate multiple tasks at a time as a bundle rather than the “marginal” “continuous” task
- Labor income doesn’t necessarily fall under partial automation and can in fact rise because automation grows the value of the remaining manual tasks, which act as bottlenecks