arxiv:2601.11496

The Poisoned Apple Effect: Strategic Manipulation of Mediated Markets via Technology Expansion of AI Agents

Published on Jan 16

· Submitted by

Eilam Shapira on Jan 19

#2 Paper of the day

Technion Israel institute of technology

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Authors:

Eilam Shapira ,

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.

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EilamSha

Paper author Paper submitter about 10 hours ago

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.