# Auction-Based Regulation for Artificial Intelligence

arXiv: https://arxiv.org/abs/2410.01871 · HTML: https://mlsanity.com/paper/2410.01871/

## Key facts

- No citing papers in the map yet (data through 14 Oct 2026).
- Builds on 15 of its 61 references that are in the map.
- First posted on arXiv 2 Oct 2024.

## Builds on (most cited first, 15 of 15)

- [Training language models to follow instructions with human feedback](https://mlsanity.com/paper/2203.02155/) (2022)
- [SQuAD: 100,000+ Questions for Machine Comprehension of Text](https://mlsanity.com/paper/1606.05250/) (2016)
- [Deep reinforcement learning from human preferences](https://mlsanity.com/paper/1706.03741/) (2017)
- [A Broad-Coverage Challenge Corpus for Sentence Understanding through Inference](https://mlsanity.com/paper/1704.05426/) (2017)
- [A Survey on Hallucination in Large Language Models: Principles, Taxonomy, Challenges, and Open Questions](https://mlsanity.com/paper/2311.05232/) (2023)
- [Safe RLHF: Safe Reinforcement Learning from Human Feedback](https://mlsanity.com/paper/2310.12773/) (2023)
- [DecodingTrust: A Comprehensive Assessment of Trustworthiness in GPT Models](https://mlsanity.com/paper/2306.11698/) (2023)
- [A Survey of Reinforcement Learning from Human Feedback](https://mlsanity.com/paper/2312.14925/) (2023)
- [Reinforcement learning](https://mlsanity.com/paper/2405.10369/) (2024)
- [Towards Safer Large Language Models through Machine Unlearning](https://mlsanity.com/paper/2402.10058/) (2024)
- [PyRIT: A Framework for Security Risk Identification and Red Teaming in Generative AI System](https://mlsanity.com/paper/2410.02828/) (2024)
- [Exploring the Deceptive Power of LLM-Generated Fake News: A Study of Real-World Detection Challenges](https://mlsanity.com/paper/2403.18249/) (2024)
- [Safety vs. Performance: How Multi-Objective Learning Reduces Barriers to Market Entry](https://mlsanity.com/paper/2409.03734/) (2024)
- [Diverse, but Divisive: LLMs Can Exaggerate Gender Differences in Opinion Related to Harms of Misinformation](https://mlsanity.com/paper/2401.16558/) (2024)
- [Regulation Games for Trustworthy Machine Learning](https://mlsanity.com/paper/2402.03540/) (2024)

## Abstract (arXiv)

In an era of "moving fast and breaking things", regulators have moved slowly to pick up the safety, bias, and legal debris left in the wake of broken Artificial Intelligence (AI) deployment. While there is much-warranted discussion about how to address the safety, bias, and legal woes of state-of-the-art AI models, rigorous and realistic mathematical frameworks to regulate AI are lacking. Our paper addresses this challenge, proposing an auction-based regulatory mechanism that provably incentivizes agents (i) to deploy compliant models and (ii) to participate in the regulation process. We formulate AI regulation as an all-pay auction where enterprises submit models for approval. The regulator enforces compliance thresholds and further rewards models exhibiting higher compliance than their peers. We derive Nash Equilibria demonstrating that rational agents will submit models exceeding the prescribed compliance threshold. Empirical results show that our regulatory auction boosts compliance rates by 20% and participation rates by 15% compared to baseline regulatory mechanisms, outperforming simpler frameworks that merely impose minimum compliance standards.