Versioned Amplification

Shapiro and Varian’s analysis of versioning—the standard information-economics strategy of offering multiple versions of an information good at different price points, allowing customers to self-select into the version matching their willingness to pay—produces a qualitatively new consequence when the information good in question is a cognitive amplifier rather than a productivity tool. When the IBM LaserPrinter E was artificially slowed to protect the premium market, a customer who paid for the slower version got less printing. When a large language model is offered in free and premium tiers differing in model capability, reasoning depth, and context window, the customer who pays for the less capable tier does not merely get less output. She gets less amplification—a weaker multiplication of her own cognitive investment. Two builders of identical capability, exercising identical judgment and care, will produce different-quality work if one is using the premium tier and the other the free tier, not because of any difference in their inputs but because their amplifiers