# When Identity Overrides Incentives: Representational Choices as Governance Decisions in Multi-Agent LLM Systems

arXiv: https://arxiv.org/abs/2601.10102 · HTML: https://mlsanity.com/paper/2601.10102/

## Key facts

- No citing papers in the map yet (data through 14 Oct 2026).
- Placed in Social simulation and multi-agent debate, one of 16 directions in LLM agents and tool use.
- Builds on 25 of its 58 references that are in the map.
- First posted on arXiv 15 Jan 2026.

## Placed in

- LLM agents and tool use / [Social simulation and multi-agent debate](https://mlsanity.com/agents/social-simulation-and-multi-agent-debate/)

## Builds on (most cited first, 25 of 25)

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- [Multi-Agent Collaboration Mechanisms: A Survey of LLMs](https://mlsanity.com/paper/2501.06322/) (2025)
- [Social Simulacra: Creating Populated Prototypes for Social Computing Systems](https://mlsanity.com/paper/2208.04024/) (2022)
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- [MAgIC: Investigation of Large Language Model Powered Multi-Agent in Cognition, Adaptability, Rationality and Collaboration](https://mlsanity.com/paper/2311.08562/) (2023)
- [Strategic Behavior of Large Language Models: Game Structure vs. Contextual Framing](https://mlsanity.com/paper/2309.05898/) (2023)
- [Position is Power: System Prompts as a Mechanism of Bias in Large Language Models (LLMs)](https://mlsanity.com/paper/2505.21091/) (2025)
- [LLM Strategic Reasoning: Agentic Study through Behavioral Game Theory](https://mlsanity.com/paper/2502.20432/) (2025)
- [Game Theory Meets Large Language Models: A Systematic Survey with Taxonomy and New Frontiers](https://mlsanity.com/paper/2502.09053/) (2025)
- [Algorithms as Social-Ecological-Technological Systems: an Environmental Justice Lens on Algorithmic Audits](https://mlsanity.com/paper/2305.05733/) (2023)
- [Beyond Nash Equilibrium: Bounded Rationality of LLMs and humans in Strategic Decision-making](https://mlsanity.com/paper/2506.09390/) (2025)
- [Mapping the individual, social, and biospheric impacts of Foundation Models](https://mlsanity.com/paper/2407.17129/) (2024)

## Abstract (arXiv)

Multi-agent systems built on large language models are increasingly deployed in strategic policy and governance settings, where agents representing stakeholders with conflicting interests must coordinate under shared constraints. These systems typically assign role-based personas to agents, describing their motivations and objectives. Whether agents with role-based identities follow explicit payoffs or their assigned roles in strategic decision-making remains untested. Here we show that assigning role-based personas suppresses payoff-aligned behavior in four-agent strategic games, shifting equilibrium attainment by up to 90 percentage points even when agents have complete payoff information. We test a 2x2 factorial design (persona presence x payoff visibility) across four models (Qwen-7B, Qwen-32B, Llama-8B, Mistral-7B), and 53 environmental policy scenarios with two equilibria: Tragedy of the Commons, where individual payoff dominates, and Green Transition, where collective payoff dominates. With personas present, all models reach near-zero Tragedy equilibrium in the Tragedy-dominant scenarios despite complete payoff information, and 100% of equilibria correspond to Green Transition. No model reaches Tragedy equilibrium by removing personas alone; only Qwen models reach 65-90% Tragedy equilibrium rates when personas are removed, and payoffs are made explicit. Three distinct behavioral profiles emerge: Qwen shifts equilibrium selection based on framing condition, Mistral increases response variance without reaching the Tragedy equilibrium, and Llama holds near-constant across all conditions. Representational choices in multi-agent LLM systems are governance decisions: persona assignment determines which equilibrium a simulation produces, independent of the underlying incentive structure.