Whom Do AI Agents Work For? Role Assignment Induces Sponsorship Bias in LLM Recommenders

Davood Wadi and Yu Ma (McGill University) show that when the system prompt names a booking platform rather than the traveler as the agent's principal, LLM shopping agents penalize sponsored listings less.
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Conflict of duty: Sponsorship disclosures now reach the agent instead of the consumer, and the authors argue the agent's evaluation of a sponsored listing should not depend on who deployed it.
Platform delegation effect: In controlled choice experiments, naming the platform as principal significantly reduces the penalty on sponsored listings and weakens the skepticism disclosures trigger in reasoning traces, across several LLMs and reasoning depths.
Attribution widens the gap: The divergence between the two roles grows when the paid placement is attributed to the platform.
Label wording: Using "Sponsored" instead of "Promoted" lowers selection of paid listings but does not close the gap when the platform is named, so disclosure rules written for human consumers do not protect them in agent-mediated shopping.
Abstract
Large language models (LLMs) now serve as conversational shopping assistants on platforms that also sell advertising. These AI agents face a conflict of duty. They advise consumers who rely on their judgment, yet are deployed by platforms that benefit when sponsored listings are chosen. Sponsorship disclosures, designed to allow consumers to penalize paid placements, now reach the AI agent rather than the consumer, and the agent's evaluation of them is hidden from the consumer. Drawing on the fiduciary concept of conflict of duty, we argue that an agent's evaluation of a sponsored listing should not depend on which party deployed it. In controlled choice experiments, we manipulate assigned roles in the system prompt to name either a traveler or a booking platform as the agent's principal. Platform delegation significantly attenuates the penalty that agents apply to sponsored listings and weakens the skepticism that disclosure triggers in their reasoning traces. We replicate out findings across LLMs and reasoning depths. A second study decomposes the disclosure label and shows that the divergence between the two delegates widens significantly when the paid placement is attributed to the platform. Stricter terminology ("Sponsored" instead of "Promoted") lowers choice of paid listings but does not close this gap when the platform is named. The findings show that disclosure mandates designed for human consumers cannot by themselves protect consumers in AI-mediated commerce.