When Firms Learn to Game the Rules
2026-06-03 • Computers and Society
Computers and Society
AI summaryⓘ
The authors studied how turning legal rules into machine-readable code affects how companies behave when they try to follow or skirt the rules. Using computer simulations with virtual firms, they found that clear, computable rules make firms cluster more around the boundary where they are just barely following the law compared to unclear rules. This suggests companies learn more precisely where to act. The authors also tested different designs and found some could reduce risky behavior and consumer harm. Their work shows these effects arise naturally from how firms adapt without saying computable regulations are good or bad in real life.
Rules-as-Codeagent-based simulationreinforcement learninglegal boundariescomputable regulationfirm behavioradaptive updatesanti-gaming designconsumer harmboundary search
Authors
Xufeng He
Abstract
Rules-as-Code promises more testable legal obligations, but it also changes what regulated firms can learn. Existing work mostly emphasizes implementation gains; the strategic gap is whether machine-readable rules make boundary search cheaper. I study that gap with a synthetic agent-based reinforcement-learning simulation that separates actual conduct near a legal threshold from proximity in the computable enforcement signal. Across 150 seed-level scenario runs, 378 common-random-number computability-sweep runs, 288 Latin-hypercube global-design runs, and a 2,880,000-row firm-period panel, computable static rules raise conduct boundary mass relative to ambiguous static rules (0.411 versus 0.367) and raise signal boundary mass more sharply (0.403 versus 0.281). Ordinary adaptive updates lower consumer harm (0.202 to 0.194) but do not reliably reduce boundary search. A budget-neutral anti-gaming design reduces conduct boundary mass by 0.032 and consumer harm by 0.025 relative to computable static rules. These are mechanism-oriented synthetic results, not estimates of real firm behavior in a jurisdiction or industry. The contribution is an estimand distinction, an inspectable ABM/RL mechanism, and a reproducible artifact showing that transparent behavioral assumptions are sufficient to generate gaming-like boundary dynamics without implying that computable regulation is inherently undesirable.