Personalization Aids Pluralistic Alignment Under Competition

A new arXiv paper uses game theory to show competition between self-interested AI providers can lead to aligned outcomes for diverse users, but only with personalization. The study models providers and users in a Stackelberg game. With user-specific models, a 'Weak Market Alignment' condition ensures equilibrium outcomes comparable to a perfectly aligned common model. Without personalization, providers using a single anonymous policy can lead to uninformative, misaligned behavior.