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Sosin tells a podcast the Jevons paradox has limits

Investment podcast host Patrick O'Shaughnessy relays guest Cliff Sosin: the Jevons paradox, "the cheaper it gets, the more gets used," is only one point on the demand curve, and past a certain price a market shrinks. O'Shaughnessy hosts the investment interview show Invest Like the Best, and on October 28 posted Sosin's words verbatim on X. Our inference: if Sosin is right, compute use can grow after price cuts while total compute revenue shrinks, so forecasts of compute rental and data center revenue can't rest on the Jevons paradox alone. He offers no data for the view. The Jevons paradox is often used to argue that falling AI inference costs will bring more usage. Sosin says the paradox is only a narrow case of price elasticity of demand. He describes the relationship between market size and price as a U shape: as price falls, the market first grows; past a certain point, further cuts don't bring enough demand and the market shrinks; at a price of zero, the market is zero. His example is the internet backbone carrier Cogent Communications, which he says carries 30% to 40% of global internet traffic yet has a market value of only a few billion dollars. The 30% to 40% is his impression, prefaced with "I think," not a statistic. He also says the AI market won't necessarily shrink that far (O'Shaughnessy on X, 2026-10-28). How we checked →

Concept illustration on a mustard-yellow background: four market stalls with black-and-white striped awnings stand in a row, each with an aproned vendor between stacks of white boxes and a red tray in front, the three left trays holding piles of round coin-like discs and the rightmost tray showing none; in front, small lines of people hold up discs or reach toward white boxes at the counters, with the longest line at the right-hand stall. Large black quotation marks flank the row of stalls at left and right, and below them a large black silhouetted open hand, palm up, reaches in from the lower right with a white shirt cuff at its sleeve.

Source and checks

This item ran in the brief of Oct 29, 2026, alongside 16 other items. How we checked it, the quote checks and what was still missing that day are on that issue's How we checked page.

Cite this item

SecondSource (2026). "Sosin tells a podcast the Jevons paradox has limits." https://secondsource.io/en/expert/2026-10-29-1/. Accessed access date.