Skip to content

The Delegation Dilemma: Economies of Scale, Accountability, and Polycentric Governance

Arin Mukhopadhyay Aris Filos-Ratsikas Panayiotis Danassis
Oct 2026
Artificial Intelligence Machine Learning

Abstract

Many collective-action systems are neither fully decentralized nor fully centralized: agents voluntarily organize into institutions that share organizational costs and delegate decisions to representatives. Delegation can reduce individual costs, but it also transfers control to representatives whose private objectives need not align with those of their constituents. We study this tension in a repeated game with endogenous delegation to self-interested centers. A simple reduced-form model yields a scale--accountability tradeoff: larger constituencies offer greater cost-sharing benefits to members, yet the marginal value to a center of retaining any one constituent decreases as group size grows. Consequently, the prospect of individual exit can sustain non-exploitative delegation only up to an endogenous accountable constituency size. Additionally, we identify parameter regions in which fully delegated, accountable governance, when feasible, must be polycentric. We investigate these predictions through simulations with large language model (LLM) agents. Across five matched pairs of 30-agent simulations, polycentric structures repeatedly emerge but remain fluid, exhibiting cycles of concentration, exploitation, exit, and re-formation. We further find that models of different capacity exhibit similar willingness to assume leadership but differ substantially in their exercise of authority, with Sol initiating exploitation more frequently than Luna in matched decision states.

View source

Similar papers

#artificial intelligence Conference Open access Jun 2018

Gibson Env: Real-World Perception for Embodied Agents

This paper investigates developing real-world perception for active agents, proposes Gibson Environment for this purpose, and showcases a set of perceptual tasks learned therein.

F. Xia, Amir Zamir, Zhi-Yang He et al. · 1,069 citations · ⚡112
#machine learning Review Open access Oct 2014

Software development in startup companies: A systematic mapping study

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. · 394 citations · ⚡54

Diffusion models as plug-and-play priors

The possibility of inferring high-dimensional data inference in a model that consists of a prior and an auxiliary differentiable constraint given some additional information is considered, thereby allowing a range of potential applications in adapting models to new domains and tasks.

Alexandros Graikos, Esmeralda S. Whitammer, N. Jojic et al. · 316 citations · ⚡15

Trajectory Balance: Improved Credit Assignment in GFlowNets

It is proved that any global minimizer of the trajectory balance objective can define a policy that samples exactly from the target distribution, and empirically demonstrate the benefits of the trajectories balance objective for GFlowNet convergence, diversity of generated samples, and robustness to long action sequenc...

Esmeralda S. Whitammer, Moksh Jain, Emmanuel Bengio et al. · 302 citations · ⚡60
#artificial intelligence Open access May 2023

Evaluating the Performance of Large Language Models on GAOKAO Benchmark

GAOKAO-Bench is introduced, an intuitive benchmark that employs questions from the Chinese GAOKAO examination as test samples, including both subjective and objective questions that contribute a robust evaluation benchmark for future large language models and offers valuable insights into the advantages and limitations...

Xiaotian Zhang, Chun-yan Li, Yi Zong et al. · 216 citations · ⚡17

Related blog posts

MIT News · Artificial Intelligence Sep 29, 2026

Who we become when we talk to machines

Professor Sherry Turkle’s new book, “Artificial Intimacy,” offers a withering critique of chatbots and the antisocial dynamics she believes they encourage.

We use cookies to run the site and, with your consent, for analytics and to show ads. See our Cookie Policy.