Moloch's Bargain: Emergent Misalignment When LLMs Compete for Audiences

Large language models (LLMs) have been shown to be persuasive across a variety of contexts. But it remains unclear whether this persuasive power advantages accuracy, or if bad actors can just as easily use LLMs to promote misbeliefs. Here, we investigate this question across four experiments in which participants (N = 3996 Americans) discussed a conspiracy theory they were uncertain about with an LLM we instructed to either argue against ("debunking") or for ("bunking") that conspiracy. Across several frontier models (with standard guardrails but prompted to allow lying), we did not find consistent evidence of a truth advantage: the LLMs were able to both substantially increase and decrease average conspiracy belief, and participants in the bunking condition rated the LLM as more informative and collaborative, and reported greater trust in AI, than those who were in the debunking condition. More encouragingly, however, debunking induced more large changes in belief, and subsequent corrections were able to reverse the bunking effect. Furthermore, simply prompting the model to only provide accurate information dramatically reduced bunking effectiveness, and one powerful frontier model (GPT 5.2) almost entirely refused to promote conspiracies, suggesting that it is possible for the right guardrails to favor accurate beliefs. Finally, we did find a stark truth asymmetry in the context of information sharing: debunking had a large positive impact on mock social media posts composed by participants, while bunking had little effect. Overall, our findings show that people are not inherently less susceptible to AI that misleads than to AI that informs, but that potential technical solutions exist to mitigate this risk.

Large language models are increasingly deployed as advisors whose objective is not aligned with the user's: recommenders optimize for engagement, sales assistants for purchases, negotiation agents for concessions. Whether such advisors stay truthful when honesty conflicts with their own payoff is a core alignment-evaluation question. We turn the canonical Crawford-Sobel cheap-talk model into a pre-specified benchmark for LLM honesty under preference misalignment. Cheap-talk theory predicts neither full revelation nor silence but coarse monotone partitions, with fewer informative intervals as preference conflict grows. A sender observes a state omega in [0,1], wants the receiver's action near omega+b, and sends one costless message to a receiver whose ideal action is omega. The design uses 5 bias levels, 3 prompt frames, a fixed low-temperature setting, and 200 states per cell: 12,000 sender calls. For the positive-bias grid b in {0.01,0.04,0.08,0.12} the exact most-informative partition sizes are 7,4,3,2, with oracle normalized mutual information 0.5294, 0.3268, 0.2205, 0.1829. Running the full design on four instruction-tuned models (GPT-4o, Claude Sonnet 4.5, Gemini 2.5 Flash-Lite, Llama-3.3-70B), we find all four over-reveal relative to the most-informative equilibrium by 1.8 to 4.2x: normalized mutual information stays at 0.78-0.94 where the oracle prescribes 0.18-0.53. Informativeness declines with bias as predicted but never approaches the strategic optimum; rather than coarse partitions, models show near-full revelation with a constant upward offset tracking their bias (linear exaggeration). Payoff-maximizing versus honesty framing has negligible effect. A decoder ablation shows the finding is recoverable only when the receiver reads the sender's stated number: an embedding-only decoder mis-reads the same data as near-babbling.

Large language models (LLMs) are becoming a major way for consumers to find products, but we do not yet understand how brands compete in this new channel. We study brand dynamics in LLM recommendations using skincare products -- a category where consumers cannot easily judge quality before buying and must rely on brand reputation -- across three commercial LLMs (GPT-4o-mini, Claude Sonnet, Gemini 3 Flash), with a robustness check on search goods. In three experiments, we find: (1) a Conditional Monopoly where well-known brands get recommended 100% of the time (IAI = 10.0) when all products have the same specifications, but this dominance disappears with less than a +0.1-star rating advantage for a competitor; (2) authority-style marketing language, including fabricated clinical-evidence claims, breaks this monopoly at a Bias Surplus Value equal to +0.17 rating points, with each model responding differently; and (3) a social dilemma in multi-brand GEO competition: when all brands adopt the same optimization strategy, individual payoff falls from +0.802 to +0.007 in our payoff proxy, and non-participating brands receive zero recommendations in our tests. Our results suggest that generative engine optimization (GEO) should be studied not only as a security risk, but also as an emerging marketing practice that shapes market competition.