Post-AGI Economies: Superposition and the Second Fundamental Theorem of Welfare Economics

Researchers propose an autonomy-qualified version of the Second Welfare Theorem for post-AGI economies, addressing how traditional economic decentralization through prices breaks down when agents possess self-modification rights, non-fungible identities, and superposed preferences. The framework establishes conditions under which Pareto-optimal allocations remain certifiably decentralizable despite these novel constraints.

This academic paper tackles a fundamental economic challenge emerging from theoretical post-AGI scenarios: how to maintain market efficiency and fair resource allocation when agents transcend traditional economic assumptions. The classical Second Welfare Theorem underpins modern market design by proving that any efficient allocation can be achieved through decentralized pricing mechanisms. However, the theorem assumes preferences are stable, goods are fungible commodities, and agents lack the ability to fundamentally alter their own utility functions or identity—assumptions that may not hold for advanced artificial agents with self-modification capabilities.

The authors recognize that autonomy, identity continuity, and preference superposition—where an agent's preferences depend on context or coexist in superposed states—introduce economic instabilities that price signals alone cannot resolve. Traditional welfare economics cannot guarantee decentralizability under these conditions even when mathematical supporting hyperplanes exist. Rather than abandoning market mechanisms entirely, the paper proposes an expanded theorem incorporating safeguards: stable moral status protections, non-fungible rights frameworks, manipulation prevention, governance over self-modification, and cryptographic verification.

For cryptocurrency and decentralized systems, this research suggests that future autonomous agent economies may require hybrid mechanisms combining markets with non-market institutions. Current DeFi protocols assume rational agents with fixed preferences; scaling these systems to incorporate self-modifying agents would necessitate novel governance structures and verification layers. The framework implies that purely algorithmic market design may prove insufficient for post-AGI scenarios, requiring explicit rights protections and identity anchoring mechanisms beyond current blockchain capabilities.

• →Traditional economic decentralization through prices fails when agents can self-modify and possess non-fungible identities
• →An expanded welfare theorem requires seven joint conditions including stable moral status and governed self-modification
• →Preference superposition differs from neural feature superposition and creates context-dependent choice behavior
• →Future autonomous agent economies may need hybrid systems combining markets with rights-protection institutions
• →Cryptographic verification and identity continuity emerge as economic infrastructure requirements for post-AGI systems