Scaling, Lock-In, and Proxy Compliance: A Political Economy of Responsible AI
AI accountability at scale is an institutional problem: who can observe, verify, and change deployed systems. We develop a sequential political-economy model in which an AI vendor chooses auditability and substantive mitigation, a deployer monitors after adoption while facing switching costs, and enforcement depends on verifiable evidence. Anticipating the deployer's monitoring response, the vendor may stop at an observable procurement floor while mitigating below the social first best, producing a proxy-compliance equilibrium. We characterize the unique interior equilibrium and the corner in which harm is fully mitigated. Independent audit rights raise enforcement exposure directly; port...
| Authors | Florian A. D. Burnat, Brittany I. Davidson |
|---|---|
| Primary category | cs.CY |
| Published | 30 July 2026 |
| Last updated at source | 30 July 2026 |
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