Creative destruction: Human-AI competition in an experimental market

We study two hypotheses for how a human role in production could persist despite growing AI capabilities. Humans might have a durable advantage in taste, designing better products even as AI agents automate routine tasks, or consumers might intrinsically prefer that humans have a hand in production. In our experiment, participants act as producers, designing computer games with an AI coding agent, and as consumers who buy them. Across three studies (N = 1,025), we find no evidence for either hypothesis. Games designed by an AI on its own outperform those of human producers, including both amateurs and professional creatives. Human producers do not anticipate the AI's advantage. Revealing whether a game is human-designed does not raise consumers' willingness to pay for the product.