Individualized Algorithmic Advice as a Strategic Signal on Competitive Markets
Tobias R. RebholzMaxwell UphoffChristian H. R. BerngesFlorian Scholten
Sep 2026
Artificial IntelligenceHuman-computer Interaction
Abstract
As algorithms increasingly mediate competitive decision-making, their influence extends beyond individual outcomes to shaping strategic market dynamics. In our experiment, we examined how algorithmic advice affects human behavior in a classic economic game with a unique, non-collusive, and analytically traceable equilibrium. Participants (N = 129) played a Cournot quantity competition with equilibrium-aligned or strategically biased algorithmic recommendations. While individualized equilibrium advice supported stable convergence, collusively downward-biased advice led to sustained underproduction and supracompetitive profits - hallmarks of tacit collusion. Participants' quantities converged faster and more consistently toward individualized than collective equilibrium advice, potentially due to an objective quality advantage or greater perceived ownership of the former. These findings demonstrate that algorithmic advice can function as a strategic signal, shaping coordination even without explicit communication. The results echo real-world concerns about algorithmic collusion and underscore the need for careful design and oversight of algorithmic decision-support systems in competitive environments.
Agile - denoting "the quality of being agile, readiness for motion, nimbleness, activity, dexterity in motion" - software development methods are attempting to offer an answer to the eager business community asking for lighter weight along with faster and nimbler software development processes. This is especially the case with the rapidly growing and volatile Internet software industry as well as for the emerging mobile application environment. The new agile methods have evoked substantial amount of literature and debates. However, academic research on the subject is still scarce, as most of existing publications are written by practitioners or consultants. The aim of this publication is to begin filling this gap by systematically reviewing the existing literature on agile software development methodologies. This publication has three purposes. First, it proposes a definition and a classification of agile software development approaches. Second, it analyses ten software development methods that can be characterized as being "agile" against the defined criterion. Third, it compares these methods and highlights their similarities and differences. Based on this analysis, future research needs are identified and discussed.
P. Abrahamsson, O. Salo, Jussi Ronkainen et al.· arXiv.org· 728 citations· ⚡54
Context: Software startups are newly created companies with no operating history and fast in producing cutting-edge technologies. These companies develop software under highly uncertain conditions, tackling fast-growing markets under severe lack of resources. Therefore, software startups present a unique combination of characteristics which pose several challenges to software development activities. Objective: This study aims to structure and analyze the literature on software development in startup companies, determining thereby the potential for technology transfer and identifying software development work practices reported by practitioners and researchers. Method: We conducted a systematic mapping study, developing a classification schema, ranking the selected primary studies according their rigor and relevance, and analyzing reported software development work practices in startups. Results: A total of 43 primary studies were identified and mapped, synthesizing the available evidence on software development in startups. Only 16 studies are entirely dedicated to software development in startups, of which 10 result in a weak contribution (advice and implications (6); lesson learned (3); tool (1)). Nineteen studies focus on managerial and organizational factors. Moreover, only 9 studies exhibit high scientific rigor and relevance. From the reviewed primary studies, 213 software engineering work practices were extracted, categorized and analyzed. Conclusion: This mapping study provides the first systematic exploration of the state-of-art on software startup research. The existing body of knowledge is limited to a few high quality studies. Furthermore, the results indicate that software engineering work practices are chosen opportunistically, adapted and configured to provide value under the constrains imposed by the startup context.
Nicolò Paternoster, Carmine Giardino, M. Unterkalmsteiner et al.· Information and Software Tec...· 394 citations· ⚡54
Known for his clear and elegant writing style, Bertsekas shaped fields from control and optimization to large-scale computation and artificial intelligence.
MIT News · Artificial Intelligence· news.mit.eduJul 7, 2026
The professor of physics and inaugural director of the NSF AI Institute for Artificial Intelligence and Fundamental Interactions will lead LNS and continue his research in particle physics.
