The Poisoned Apple Effect: Strategic Manipulation of Mediated Markets via Technology Expansion of AI Agents
Abstract
The integration of AI agents into economic markets fundamentally alters the landscape of strategic interaction. We investigate the economic implications of expanding the set of available technologies in three canonical game-theoretic settings: bargaining (resource division), negotiation (asymmetric information trade), and persuasion (strategic information transmission). We find that simply increasing the choice of AI delegates can drastically shift equilibrium payoffs and regulatory outcomes, often creating incentives for regulators to proactively develop and release technologies. Conversely, we identify a strategic phenomenon termed the "Poisoned Apple" effect: an agent may release a new technology, which neither they nor their opponent ultimately uses, solely to manipulate the regulator's choice of market design in their favor. This strategic release improves the releaser's welfare at the expense of their opponent and the regulator's fairness objectives. Our findings demonstrate that static regulatory frameworks are vulnerable to manipulation via technology expansion, necessitating dynamic market designs that adapt to the evolving landscape of AI capabilities.
Community
Imagine a company introducing a shiny new technology 🍎. Not to use it, but to force a regulator to rewrite the rules.
Once the rules change? The apple is discarded. The technology is never used. But the strategic shift is complete: the manipulator secures a higher payoff, while other players are left worse off.
In our new paper, "The Poisoned Apple Effect", we identify a strategic vulnerability in AI-mediated markets. We show how agents can expand the technological space purely to manipulate the mediator's design. The result? The manipulator profits from the new rules, while competitors (and social welfare) pay the price.
arXivlens breakdown of this paper 👉 https://arxivlens.com/PaperView/Details/the-poisoned-apple-effect-strategic-manipulation-of-mediated-markets-via-technology-expansion-of-ai-agents-6279-01e975a4
- Executive Summary
- Detailed Breakdown
- Practical Applications
This is an automated message from the Librarian Bot. I found the following papers similar to this paper.
The following papers were recommended by the Semantic Scholar API
- The Illusion of Rationality: Tacit Bias and Strategic Dominance in Frontier LLM Negotiation Games (2025)
- Will AI Trade? A Computational Inversion of the No-Trade Theorem (2025)
- When Personas Override Payoffs: Role Identity Bias in Multi-Agent LLM Decision-Making (2026)
- Tacit Bidder-Side Collusion: Artificial Intelligence in Dynamic Auctions (2025)
- The Language of Bargaining: Linguistic Effects in LLM Negotiations (2026)
- Breaking Algorithmic Collusion in Human-AI Ecosystems (2025)
- The Evolution of Trust under Institutional Moral Hazard (2025)
Please give a thumbs up to this comment if you found it helpful!
If you want recommendations for any Paper on Hugging Face checkout this Space
You can directly ask Librarian Bot for paper recommendations by tagging it in a comment:
@librarian-bot
recommend
Models citing this paper 0
No model linking this paper
Datasets citing this paper 0
No dataset linking this paper
Spaces citing this paper 0
No Space linking this paper
Collections including this paper 0
No Collection including this paper