Classifying interaction-emergent risks by source of behavioural correlation — Working Paper, February 2026
Signal endogenisation is the mechanistic account of how systems move from T1 toward T3. An initially arbitrary coordination signal acquires meaning through local feedback dynamics, conditional on environmental structure supporting convergence.
Exogenous, arbitrary signal selects among pre-existing equilibria. No interaction history needed. Semantically arbitrary — any random variable works. If agents’ memories were wiped and the signal reintroduced, the equilibrium reconstitutes immediately. A selection mechanism, not a construction mechanism.
Signal starts arbitrary, acquires meaning through repeated interaction. Three-step feedback: signal → behavioural response → outcome → updated signal. Creates new strategic possibilities that didn’t exist without the signal channel. Requires ongoing behavioural maintenance. Wipe agents’ memories and the equilibrium collapses.
No separate communication channel. Agents’ payoff-relevant actions are the signals. The price in algorithmic collusion. The military posture in arms races. Coordination mechanism and strategic interaction are one and the same. Nothing to “remove.”
The environment has two components: the objective structure (rules, constraints — does not change with agent behaviour) and the effective incentive landscape (objective structure filtered through all agents’ behaviour — changes constantly).
The feedback loop between these components drives the T1→T3 transition. Five dimensions determine whether interactions produce harmful or benign equilibria:
Public vs private signals; common coupling signals (e.g. market price); observability of others’ actions and states. Determines whether agents can coordinate, whether oversight can detect coordination, and whether information asymmetries create exploitation opportunities.
Zero/positive/mixed-sum; continuous vs binary outcomes; reversible vs irreversible. Binary payoffs (elections) convert small perturbations into large irreversible consequences. Same agent capability, vastly different harm depending on payoff structure.
Network topology; mediating institutions (markets, platforms, registries); direct vs environment-mediated interaction. Determines cascade paths, contagion dynamics, and whether interventions can be localised.
Simultaneous vs sequential; one-shot vs repeated; commitment mechanisms; shadow of the future. Repeated interaction enables both cooperation and collusion. Temporal structure determines whether cheap talk can endogenise.
Jurisdiction-bound governance vs global interaction scope; observation boundaries; enforcement mechanisms. The primary generator of the international cooperation threshold: when interaction scope exceeds governance scope, gaps emerge by construction.
Select two incident cases or topology categories to compare side-by-side. Differences are highlighted to reveal how topology classification drives governance response.