Model Selection Economics

In one sentence

Model selection economics compares total workflow cost and outcomes across models—not sticker price per million tokens alone.

Why it matters

Cheaper models can raise retries and review time. Expensive models can waste money on trivial edits. Unit price is not total cost.

How it works

• Benchmark on your task classes with fully loaded cost (tokens + retries + review).
• Route simple tasks to smaller/cheaper models; reserve frontier models for hard reasoning.
• Re-evaluate when caching, context size, or product pricing changes.
• State confidence intervals; avoid one-off anecdotes as policy.

Example

Model A costs 5× more per token but finishes a migration in one pass with light review. Model B needs six loops and heavy review. A can win on total cost despite higher unit price.