Embracing the Enemy
\'Alvaro Delgado-Vega, Johannes Schneider

TL;DR
This paper models a dynamic game where a principal manages two competing agents, initially excluding but eventually embracing the enemy to achieve policy moderation and influence the friend, revealing strategic trade-offs in power and policy alignment.
Contribution
It introduces a novel strategic framework for understanding how a principal optimally interacts with adversarial agents over time to shape policy outcomes.
Findings
Principal's initial exclusion of the enemy is optimal.
Embracing the enemy leads to policy moderation.
Strong commitment allows more embracing when the friend is close.
Abstract
Two agents repeatedly compete for the power to set policy. A principal partially influences the power allocation. All three players may disagree on policy, but one agent (the ``friend'') aligns more closely with the principal than the other (the ``enemy''). The principal's optimal contract aims to exclude the enemy initially. However, once the enemy gains power, the principal embraces him, trading power for policy moderation. Moreover, the principal leverages the enemy's moderation to move the friend's policies toward her bliss point. If her commitment is strong enough, a principal offers more embrace to the enemy when her friend is close.
Peer Reviews
No public reviews on file for this paper yet. If you reviewed it on a platform where reviews are public (OpenReview, ICLR, NeurIPS, ICML), you can paste yours below so the community can read it here.
Videos
No videos yet. Explain this paper in a talk, walkthrough, or lecture? Add one.
Taxonomy
TopicsGame Theory and Applications · Experimental Behavioral Economics Studies · Economic Policies and Impacts
MethodsSeventeen Ways to Call Uphold Helpline Full Guide USA 24 Hour Assistance
